6 August 2019 – senior secured notes offering process update

Sirius Minerals has surprised the market by announcing that it has decided to suspend the proposed offer by its wholly owned subsidiary of US$500m of senior secured notes due 2027, due to current market conditions.  It has stated that intends to revisit the market when conditions have improved later this quarter.  This is clearly a problem but in time it should be overcome, even if the manner in which this financing is raised changes.  We continue to believe that there is considerable scope for upside over the longer term but change our rating to SPECULATIVE BUY given increased risk.