Initiate on PON & NCIG – deleveraging credits + coal premium overbaked in bonds

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Initiate on PON & NCIG – deleveraging credits + coal premium overbaked in bonds

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Australia Credit Bond

Initiate on PON & NCIG – deleveraging

credits + coal premium overbaked in bonds

Initial Opinion - Credit

Initiate on Australia-based coal export infrastructure 25 June 2026 Corrected

We initiate coverage on two Australia‑based coal port and terminal operators – Port of Global Corporate Credit

Newcastle (ticker: PONEIV) and Newcastle Coal Infrastructure (ticker: NCIAU). The coal- Asia Pacific (including Australia &

exposure premium (>40bp for NCIAU and >20bp for US$ PONEIV vs similar-rated peers) Japan)

appears overpriced, compared with 10-20bps spread gap seen in pairs such as PLNIJ vs

Xiang Gao, CFA

PERTIJ and CEZCP vs PKNPW (Exhibit 9). Our constructive view is further supported by Research Analyst

their predictable cash flows with limited sensitivity to coal prices and volume risks, a Merrill Lynch (Singapore)

+65 6678 0941

clear deleveraging path, and scarcity of BBB supply in Asian credit. xiang.gao@bofa.com

PONEIV: deleveraging while diversifying beyond coal JingResearchPengAnalyst

Port of Newcastle (PON) is the largest coal-export port globally, and a critical logistics Merrill+852 3508Lynch3105(Hong Kong)

hub for Australia’s Hunter Valley. PON’s EBITDA has been growing in recent years, due to jing.peng2@bofa.com

the progressive rises in wharfage tariffs given the implementation of the new pricing Suyang Lu

framework. Plus, its "true up" mechanism insulates PON’s cash flows from volume ResearchMerrill LynchAnalyst(Hong Kong)

volatility. While the high exposure to coal‑related activities poses a long‑term structural +852 3508 5066

risk, PON is actively pursuing diversification beyond coal, targeting to reduce coal’s suyang.lu@bofa.com