METCZ: An 8.375% Senior Note IPO From Ramaco Resources

Summary

  • Ramaco Resources, Inc.'s new 8.375% Senior Notes due 2029, METCZ, have increased the company's Debt-to-Equity ratio from 0.25 to 0.39.
  • If Ramaco Resources's earnings are maintained, the company should have enough of a cushion to meet the increased debt payments.
  • Stock dividend distributions may signal potential cash flow issues, raising concerns for potential debt investors about Ramaco Resources' financial stability.
  • METCZ is relatively overvalued compared to its treasuries benchmark.
  • Safer investments with similar durations and comparable yields make METCZ less appealing.

Coal Worker With Handful Of Coal

Monty Rakusen

Co-authored by Relative Value.

Overview

This is our next-in-line article in which we turn our attention to a new fixed-income IPO. This time we will examine Ramaco Resources, Inc.'s (NASDAQ:METC) latest exchange addition — the Ramaco Resources, Inc. 8.375% Senior

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This article was written by

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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