PLS Group (ASX:PLS) received an issuer default rating of "BB" with a stable outlook from Fitch Ratings, reflecting its strong business profile as a lithium producer with a production capacity of 1 million tonnes per annum, long reserve life, and flexibility on production levels, according to a Tuesday note from the credit ratings agency.
Fitch also assigned PLS's proposed $500 million senior unsecured notes a rating of "BB," the same as PLS's long-term issuer default rating. The ratings firm expects the placement of new bonds to be leverage-neutral because the proceeds will be also used to repay outstanding debt.
PLS is the third-largest primary lithium producer globally, and it expects to raise annual production to 820,000 to 870,000 tonnes in fiscal 2026 from its actual output of 755,000 tonnes a year earlier after the completion of the P1000 expansion project. Fitch expects its free-on-board costs to improve to AU$600 per tonne in fiscal 2026 and to AU$550 per tonne in fiscal 2028.
PLS is seeking to capture additional value through vertical integration in the battery-material supply chain, and its diversification plan can reduce margin volatility through the cycle, the report noted.
PLS Group's shares jumped 2% in recent Tuesday trade and earlier hit an all-time high.