Fitch prunes Vertex Energy

Fitch Ratings said it downgraded Vertex Energy Inc.'s (Vertex) and Vertex Refining Alabama LLC's long-term issuer default ratings to CCC+ from B-. The agency also lowered the rating of Vertex Refining Alabama's senior secured term loan to B-/RR3 from B/RR3.

“The downgrade reflects Vertex's weaker liquidity buffer amid lower U.S. Gulf Coast refining crack spreads and weak Fitch-expected contribution from renewable diesel segment in 2024. The company's FCF generation is highly sensitive to refining crack spreads that declined in 4Q23 from abnormally high 2022-2023 levels. Its unrestricted cash balance fell from $141 million at YE 2022 to around $70-80 million at YE 2023.

“Fitch projects negative EBITDA and FCF for Vertex in 2024 based on the assumptions of continued crack spread normalization and weak renewable diesel profitability,” the agency said in a press release.

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