Investing.com -- Moody’s Ratings has revised the outlooks for CNX Resources Corporation and CNX Midstream Partners LP from stable to positive while affirming their Ba3 Corporate Family Ratings.
The rating agency also affirmed CNX’s Ba3-PD Probability of Default Rating and B1 ratings for its senior unsecured notes, while maintaining the company’s Speculative Grade Liquidity rating at SGL-1. Similarly, CNXM’s Ba3-PD PDR and B1 senior unsecured notes ratings were affirmed.
"The change in CNX’s outlook to positive considers the company’s flexibility in capital allocation and expectation for positive free cash flow next year that could support debt reduction and a durable strengthening in credit metrics," said Jonathan Teitel, a Moody’s Vice President.
The positive outlook for CNX reflects Moody’s expectation that the company will generate positive free cash flow in 2026, supported by natural gas demand fundamentals and a significant portion of hedged natural gas production. If this cash flow is directed toward debt repayment, it could strengthen the company’s credit metrics.
CNXM’s positive outlook aligns with CNX’s and reflects expectations for continued strong credit metrics.
CNX’s Ba3 rating is supported by its large-scale natural gas production in a low-cost basin, substantial proved reserves, and extensive drilling opportunities. The company’s January 2025 acquisition of Apex Energy II, LLC added complementary assets and increased scale.
The rating agency highlighted CNX’s conservative financial policies, strong liquidity, and successful operational and financial risk management. While the Apex acquisition increased debt, CNX only termed out a portion via senior notes, leaving significant revolver debt that can be reduced with free cash flow.
As of September 30, 2025, CNX had $247 million in borrowings and $27 million in letters of credit outstanding on its $1.4 billion revolver. CNXM had $21 million outstanding on its $600 million revolving credit facility.
Factors that could lead to an upgrade for CNX include significant debt reduction, managing shareholder returns within cash flow, retained cash flow to debt above 30%, and a leveraged full cycle ratio above 1.5x at mid-cycle natural gas prices.
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