Group 1 - Natural Resource Partners L.P. (NRP) is a master limited partnership focused on mineral rights and infrastructure, primarily generating income from coal production, with 35% of revenues derived from infrastructure fees [2][4] - The company holds a non-controlling interest in the Sisecam soda ash operation, which has seen a decline in income from $73 million to $16 million, but still has recovery potential [3] - Current free cash flow is approximately $150 million, indicating a sustainable baseline compared to peak operating income exceeding $300 million [3] Group 2 - Management is implementing a disciplined deleveraging strategy aimed at achieving zero debt within 12 months, after which capital returns through dividends and buybacks are expected to accelerate [4] - NRP is projected to deliver a double-digit free cash flow yield, with dividends anticipated to increase post-debt repayment [4][5] - The investment opportunity is enhanced by the avoidance of MLPs by many investors due to tax complexities, leading to potential mispricing [5] Group 3 - Despite market challenges, NRP generated $100 million in operating cash flow during a severe downturn in 2020, reflecting a 7% yield at current valuations [4] - The company benefits from nominal royalty pricing, providing inflation protection and potential upside from carbon capture revenues [4] - The stock price has appreciated approximately 2.4% since previous bullish coverage, with ongoing expectations for dividend reinstatement and robust cash flow [6]

Core Viewpoint - Natural Resource Partners L.P. (NRP) has been upgraded to "Neutral" due to its improving balance sheet and consistent cash flow, which are mitigating the impacts of weak commodity pricing [1][8]. Financial Performance - NRP reported $34 million in net income and $46 million of free cash flow in Q2 2025, leading to a trailing 12-month free cash flow exceeding $200 million [1]. - The partnership's leverage has been reduced to 0.5X EBITDA, with plans to retire all debt by mid-2026, enhancing its financial position and reducing interest costs [2]. Market Conditions - Despite improvements in financial structure, NRP faces significant market headwinds, with coal revenues declining sharply due to falling pricing and volumes, particularly in metallurgical coal linked to weak global steel demand [3]. - The soda ash market is also under pressure from global oversupply and sluggish demand in construction and automotive sectors, leading to reduced income from Sisecam Wyoming [4]. Strategic Positioning - NRP's financial strengthening allows for a refocus on capital returns, with future cash directed towards increased unitholder distributions, opportunistic repurchases of common units, and selective acquisitions if market conditions are favorable [6]. - The partnership has maintained quarterly distributions at 75 cents per unit, reflecting management's confidence in cash flow despite current market challenges [7]. Rating Rationale - The upgrade to "Neutral" reflects a balance between ongoing commodity price challenges and a significantly improved financial position, with deleveraging enhancing liquidity and providing a clearer path for capital returns [8][9].

Core Viewpoint - Fosun International Ltd. is continuing its strategy of divestment to improve its capital structure and liquidity, as evidenced by the sale of 40% of its Luz Saúde healthcare group for 310 million euros ($364 million) while retaining a 60% stake in the company [2][3][4] Group 1: Strategic Benefits of the Sale - The sale of Luz Saúde is expected to enhance the company's capital structure and liquidity, facilitate business growth through collaboration with a strategic partner, and strengthen the shareholder base for mid-term expansion [3] - Luz Saúde operates 29 medical facilities in Portugal, serving 75% of the population, indicating its significant market presence [4] Group 2: Ongoing Investment Strategy - Fosun's divestment strategy is not a retreat from Portugal but rather a method to maintain market exposure while improving debt metrics and generating capital for further investments [6][9] - The company has previously sold stakes in other investments, such as 5.6% of Banco Comercial Português for 235 million euros and two towers in Lisbon for 192 million euros, while retaining control over these assets [5] Group 3: Financial Recovery and Debt Management - Fosun's total debt was reported at 222.1 billion yuan ($31 billion) as of June, with a slight increase from the previous year, while holding 67.8 billion yuan in cash and bank balances [10] - The company has been actively deleveraging since mid-2022, selling various assets to stabilize its finances and improve funding access [12] - Following its recovery, Fosun returned to the U.S. dollar bond market, issuing $300 million in notes, which was viewed positively by S&P, affirming its credit rating with a stable outlook [13][14]

Key Takeaways Ashford signed an agreement to sell the 150-room Residence Inn San Diego Sorrento Mesa for $42M.The deal implies a 5.7% cap rate with expected $16M capital spend, or 7.9% cap rate without the spend.CEO says the sale supports deleveraging efforts and enhances financial flexibility for AHT.Ashford Hospitality Trust (AHT) recently signed a definitive agreement to sell the 150-room Residence Inn San Diego Sorrento Mesa in San Diego, CA, for $42 million. Subject to closing conditions, the sale is e ...

Economic Cycles - The economy functions like a machine, driven by short-term and long-term debt cycles [4] - Short-term debt cycles, typically lasting 5 to 8 years, are primarily controlled by the central bank through interest rate adjustments [5] - These cycles involve expansion fueled by credit, leading to inflation, followed by contraction (recession) when the central bank raises interest rates [1][2][3] - Long-term debt cycles occur because debts rise faster than incomes over decades, leading to a debt burden [6] - The ratio of debt to income is called the debt burden, which remains manageable as long as incomes rise [7] Debt and Credit - Spending increases are fueled by credit, which can be created instantly [1] - When credit is easily available, there's an economic expansion; when it's not, there's a recession [4] - Rising incomes and asset values help borrowers remain creditworthy for a long time, even with accumulating debt [8] - At some point, debt repayments grow faster than incomes, forcing people to cut back on spending, leading to a reversal of the cycle [9] - Debt burdens become too big, leading to deleveraging, as seen in 2008 in the United States and Europe [10][11] Inflation and Deflation - Inflation occurs when spending and incomes grow faster than the production of goods, causing prices to rise [1] - The central bank raises interest rates to combat inflation [2] - Deflation occurs when people spend less, causing prices to go down, leading to a recession [3] Human Behavior - People have an inclination to borrow and spend more instead of paying back debt, pushing the economy [5] - Lenders freely extend credit because everyone thinks things are going great, focusing on rising incomes and asset values [6] - People borrow huge amounts of money to buy assets as investments, causing their prices to rise even higher, creating a boom and potentially a bubble [8][7]

Core Viewpoint - Seneca Foods Corporation (SENEA) has been upgraded to an "Outperform" rating due to expected volume recovery from a key co-pack customer, benefits from deleveraging reducing interest expenses, and a normalization in gross margins as high-cost inventory dissipates, enhancing its earnings power and market position in packaged fruits and vegetables across North America [1] Volume Recovery - In the first quarter of fiscal 2026, Seneca's sales decreased by 2.4% year over year to $297.5 million, down from $304.7 million, primarily due to shipment disruptions from a key co-pack customer [2] - Management anticipates that these volumes will recover under the existing contractual relationship, providing a near-term boost to revenue as fiscal 2026 progresses [2] - Resilient consumer demand for shelf-stable vegetables and snacks is expected to stabilize revenue momentum [2] Interest Expense Decline - Seneca experienced a significant reduction in interest expense, which fell by 47.7% year over year to $5.4 million from $10.3 million in the first quarter of fiscal 2026, due to aggressive debt paydown and refinancing [3] - Long-term debt has been reduced to $259.5 million, with the revolver refinanced through 2029, positioning the company for continued interest savings over the next several quarters [3] - This deleveraging, along with steady operating cash flow, is expected to provide an uplift in earnings per share (EPS) and enhance balance sheet flexibility [3] Gross Margin Recovery - Gross margin improved to 14.1% in the first quarter of fiscal 2026, up from 14% a year ago, despite challenges from high-cost inventory due to unfavorable weather conditions [4] - Management noted progress in selling through high-cost inventory, with expectations for a normalized growing season in 2025 to ease input pressures and improve gross margin [4] - An $11.8 million LIFO credit was recorded in the quarter compared to $2.9 million last year, contributing to margin stability [4] Structural Positioning and Outlook - Seneca benefits from a large and resilient demand base for shelf-stable foods, which continue to see steady consumer preference across various channels [7] - The company's scale in private-label and branded categories, bolstered by the Green Giant shelf-stable vegetable line, enhances its market presence [7] - Disciplined working capital management and debt reduction have improved free cash flow visibility, allowing for reinvestment in operations while reducing financial risk [8]

Report Industry Investment Rating - Not provided Core Viewpoints - The secondary IG market in Japan faced pressure due to heavy supply, with new issues widening and perpetuals under pressure. Chinese IG also widened, while some Chinese property and Macau gaming bonds showed mixed performance. Fosun's new bond issuance and tender offer are part of its debt management, and its credit profile is improving [2][8][11] Summary by Relevant Catalogs Trading Desk Comments - Yesterday, there were 6 Japanese and 1 Indian bond in the IG new issuance pipeline, pressuring the Japanese secondary IG market. New issues like JERA/HOKKEL/MITSCO widened 2 - 4bps, and perpetuals were pressured by the bear - steepening USD yield curve. Japanese insurance hybrids/AT1s and Yankee AT1s/insurance hybrids declined. China IG widened 2 - 4bps, with better selling on TMT names. Some bonds like FOSUNI 26 - 28s and DALWAN 11 02/13/26 rose. In Chinese properties and Macau gaming, bonds had mixed performance. TW lifers tightened, Korea IG widened, and SEA space had various movements [2] - This morning, new bonds like MUFG 31 - 36/MUFG 6.35 Perp had different price changes. FOSUNI 6.8 09/09/29 was 0.3pt higher, and ADANEM 30 - 31s were 0.2 - 0.5pt higher [3] - In the LGFV space, there was a mixed two - way session with more selling, and bonds repriced 30 - 50bps wider from YTD tights [4] - The top performers included BIMLVN 7 3/8 05/07/26 with a 1.3 price increase, while top underperformers like GLPSP 4 1/2 PERP dropped 2.3 [5] Macro News Recap - On Tuesday, S&P (-0.69%), Dow (-0.55%), and Nasdaq (-0.82%) were lower. US Aug'25 S&P Global Manufacturing PMI was 53.0 (lower than expected), and ISM Manufacturing PMI/Prices were 48.7/63.7 (lower than expected). UST yield was higher, with 2/5/10/30 - year yields at 3.66%/3.74%/4.28%/4.97% [7] Desk Analyst Comments - Analysts are neutral on the new FOSUNI 6.8 09/09/29. Fosun priced the bond at 6.8% (vs IPT of 7.2%), with an issue size capped at USD400mn on an order book over USD2.5bn. The bond has a 4 - year tenor with a 2.5 - year non - call period. Analysts view its valuation as fair, and for Chinese HY, they prefer BTSDF 9.125 07/24/28 and EHICARs [8] - Fosun announced a tender offer for USD500mn FOSUNI 5 05/18/26, to be financed by the new bond issue and/or internal resources. The offer expires on 10 Sep'25 4pm (GMT) and will be settled around 16 Sep'25. Participation in the tender offer doesn't provide priority allocation for the new bond [9] - The new issuance and tender offer are part of Fosun's debt maturity management. In 2025, Fosun has repurchased bonds via tender offers and called the remaining amount. As of Jun'25, it held RMB16bn cash and RMB89.2bn total debt at holdco level, with a plan to deleverage further [10] - Fosun's credit profile is improving due to asset disposals, debt maturity management, and better access to funding channels onshore and offshore. It has issued bonds and raised loans in 2024 - 2025 [11] Offshore Asia New Issues (Priced) - Multiple issuers including Arab National Bank, Ares Capital, Credit Agricole, etc., have priced new bonds with different sizes, tenors, coupons, and issue ratings [12] Offshore Asia New Issues (Pipeline) - Fubon Life, PTT Global Chemical, and Sumitomo Life Insurance have bonds in the issuance pipeline with specified tenors, pricing, and issue ratings [13] News and Market Color - Yesterday, 37 onshore credit bonds were issued with an amount of RMB25bn. Month - to - date, 99 credit bonds were issued, raising RMB68bn, a 10.8% yoy decrease. NIO's 2Q25 revenue rose 9% yoy to RMB19bn. India regulator approved SMBC's acquisition of 20% shareholding in YES Bank, and the US revoked TSMC waiver for shipping chipmaking tools to China [14]

Core Insights - StealthGas Inc. reported strong profitability in Q2 2025 with a net income of $20.4 million, a 45% increase from Q1 2025 but a decrease from $25.8 million in Q2 2024 [4] - The company achieved record revenues of $47.2 million in Q2 2025, a 13% increase year-over-year, driven by improved market conditions and an increase in fleet size [4] - The company has secured approximately $155 million in contracted revenues for the remainder of 2025, with about 70% of fleet days under period charters [4][8] Operational Highlights - The average number of vessels owned increased to 28.3 in Q2 2025 from 27.0 in Q2 2024 [4][6] - Fleet utilization improved to 99.7% in Q2 2025 compared to 98.1% in Q2 2024 [21] - The company has maintained a strong cash position with $87.3 million in cash and cash equivalents as of June 30, 2025, allowing for debt repayments [4][31] Financial Performance - Total revenues for the six months ended June 30, 2025, were $89.3 million, up from $83.4 million in the same period of 2024 [6] - Adjusted net income for the six months ended June 30, 2025, was $37.9 million, down from $46.7 million in the prior year [6] - EBITDA for the six months ended June 30, 2025, amounted to $48.3 million, compared to $60.7 million for the same period in 2024 [6] Debt Management - The company repaid $53.6 million in debt during the first half of 2025 and an additional $32.2 million in Q3 2025, resulting in a debt-free fully owned fleet [4][12] - Interest and finance costs decreased significantly to $2.0 million for the six months ended June 30, 2025, from $5.9 million in the same period of 2024 [6] Fleet Update - The fleet size increased to 29 vessels following the consolidation of two vessels previously owned through joint ventures [9] - The company has entered into a sale agreement for the vessel Gas Elixir, expected to enhance liquidity [10] Incident Report - The LPG tanker ECO WIZARD experienced explosions while loading ammonia in July 2025, resulting in damage and temporary loss of revenue, which accounted for approximately 8% of the company's revenues in the first half of 2025 [11][12]

Core Insights - Newmont Corporation (NEM) is actively improving its leverage profile by reducing debt significantly, retiring $372 million in the second quarter and ending with net debt of $1.422 billion, down from $3.221 billion in the previous quarter [1][7] - The company's strong free cash flow generation, which surged nearly threefold year over year and increased by 42% from the prior quarter to $1.7 billion, has supported this deleveraging effort [2][7] - NEM is balancing its deleveraging strategy with the integration of the Newcrest acquisition and asset streamlining through strategic non-core divestments, while maintaining a strong cash flow generation [3] Industry Comparison - Kinross Gold Corporation (KGC) has also improved its leverage profile, reducing net debt to approximately $100 million from $540 million in the previous quarter, with a second-quarter free cash flow increase of roughly 87% year over year [4] - Agnico Eagle Mines Limited (AEM) focused on debt reduction, decreasing long-term debt by $550 million to $595 million, while ending the quarter with a net cash position of $963 million, allowing for funding of growth projects and shareholder value [5] Market Performance - NEM shares have increased by 85.4% year to date, outperforming the Zacks Mining – Gold industry's rise of 68%, largely driven by a rally in gold prices [6][7] - The Zacks Consensus Estimate for NEM's 2025 earnings indicates a year-over-year rise of 51.4%, with EPS estimates trending higher over the past 60 days [8] - NEM is currently trading at a forward 12-month earnings multiple of 13.12, slightly below the industry average of 13.20, and carries a Value Score of B [9]

Core Insights - Agnico Eagle Mines Limited (AEM) has made significant progress in strengthening its balance sheet, reducing long-term debt by $550 million to $595 million at the end of Q2, and ending the quarter with a net cash position of $963 million, indicating a commitment to financial discipline [1][7] - The company generated strong free cash flow of $1,305 million in Q2, more than doubling the previous year's figure of $557 million, supported by high gold prices and robust operational results [2][7] - AEM's ultra-low debt-to-capitalization ratio of 2.8% enhances financial flexibility, allowing the company to fund growth projects and drive shareholder returns without relying heavily on external financing [3][7] Financial Performance - AEM's Q2 free cash flow surged to $1.3 billion, significantly up from $557 million year-over-year, reflecting strong operational performance and favorable market conditions [2][7] - The company's shares have increased by 72.9% year-to-date, slightly outperforming the Zacks Mining – Gold industry's rise of 72.6% [6][7] Peer Comparison - Kinross Gold Corporation (KGC) improved its net debt position to approximately $100 million from $540 million in the prior quarter, with a Q2 free cash flow increase of roughly 87% year-over-year [4] - Newmont Corporation (NEM) reduced its debt by $372 million in Q2, ending with net debt of $1,422 million, down from $3,221 million in the previous quarter [5] Valuation Metrics - AEM is currently trading at a forward 12-month earnings multiple of 19.55, which is about 45.2% higher than the industry average of 13.46 [8] - The Zacks Consensus Estimate for AEM's earnings in 2025 and 2026 indicates a year-over-year rise of 64.1% and 0.8%, respectively, with EPS estimates trending higher over the past 60 days [9]