Fuel maker’s default rating lowered due to crack spread declines

  • Vertex Energy shares hit a two-year low after Fitch downgraded the fuel maker’s default rating
  • The downgrade was due to declines in the crack spread between refined products and crude oil
  • Shares fell 15% to $1.58, the lowest since May 2021
  • Fitch downgraded Vertex’s long-term issuer default ratings to CCC+ from B-
  • The downgrade reflects weaker liquidity and expectations of a weaker contribution from Vertex’s renewable diesel business
  • Vertex’s unrestricted cash balance dropped to $70-80 million at the end of 2023

Shares of Vertex Energy plunged to a two-year low after Fitch downgraded the fuel maker’s default rating. The downgrade was a result of declines in the crack spread between refined products and crude oil. In early trading, shares fell 15% to $1.58, marking the lowest level since May 2021. Fitch downgraded Vertex’s long-term issuer default ratings to CCC+ from B-, citing weaker liquidity and expectations of a weaker contribution from Vertex’s renewable diesel business. The company’s unrestricted cash balance also dropped to $70-80 million at the end of 2023.

Public Companies: Vertex Energy (N/A)
Private Companies:
Key People:

Factuality Level: 8
Justification: The article provides specific information about the downgrade of Vertex Energy’s default rating by Fitch and the reasons behind it, including the decline in crack spreads and weaker liquidity. It also mentions the drop in the company’s stock price and the downgrade of its stock rating by Northland Capital Markets. The information provided is specific and factual, without any obvious bias or misleading information.

Noise Level: 6
Justification: The article provides relevant information about Vertex Energy’s stock drop and the reasons behind it. It includes details about Fitch’s downgrade of the company’s default rating and the factors contributing to it, such as declining crack spreads and weaker liquidity. The article also mentions Northland Capital Markets’ downgrade of Vertex’s stock rating. However, the article lacks in-depth analysis or insights into the long-term trends or antifragility of the company. It mainly focuses on the immediate impact of the downgrade and stock drop.

Financial Relevance: Yes
Financial Markets Impacted: Shares of Vertex Energy

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses the downgrade of Vertex Energy’s default rating by Fitch due to declines in the price difference between refined products and crude oil. This downgrade has led to a drop in Vertex Energy’s stock price. While this event has financial implications for the company, there is no mention of an extreme event or its impact.

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