Fitch Ratings has given National Group a first-time B-(EXP) expected long-term issuer default rating, while its proposed $400 million secured bonds estimated to be due 2030 received a B(EXP) expected rating, according to a recent release.

The Australian mining service provider's expected rating entails a small scale and focus on some commodities and customers, lessening its capacity to offset shocks and increasing risks of not complying with bond covenants, Fitch said.

However, the company's solid customer linkages and defensive cost structure protect its earnings against short-term volatility while future demand visibility gets support from the exposure to the country's robust mining industry, the rating agency said.

Subsidiary National Plant and Equipment will issue the proposed bonds, with a guarantee from all material group companies that comprise about 80% of the group's consolidated total assets and EBITDA.

Developments in the company's EBITDA net leverage, planned refinancing that includes the proposed issue, or scale and diversification could lead to future rating actions, Fitch said.