Moody’s cuts Anglo debt to junk
by Agency Staff,
2016-02-15 20:41:45.0
ANGLO American’s credit rating was cut to junk by Moody’s Investors Service, which said slumping commodity prices had damaged its ability to pay down debt.
"The company now faces a higher business risk due to deterioration in commodities market conditions, and a longer and more uncertain deleveraging period than previously expected," Moody’s said in a statement on Monday.
London-based Anglo is seeking to turn around its fortunes with a drastic downsizing plan. The company is set to report full-year results on Tuesday and update investors on its move to reduce by more than half the number of mines it owns and eventually lower employee numbers to 50,000 from 135,000. Anglo lost 75% of its market value last year as investors questioned its survival given billions in debt and metal prices at six-year lows.
The credit downgrade "reflects a significant deterioration" in Anglo’s debt capacity and that Moody’s does not expect Anglo to deliver a substantial debt reduction in the next two years, according to the statement. There is a risk that Anglo’s iron-ore business could deteriorate further, Moody’s said.
In December, Anglo’s chief financial officer Rene Medori said any downgrade would not impact the cost of financing or the way Anglo runs its business.
Moody’s put Anglo on review for a downgrade in December because of slumping commodity prices and its plans to reduce production.
Bloomberg
Anglo Platinum miners board an underground lift underground at Thembelani 1Shaft in Rustenburg in this May 2014 file photo Picture: SUNDAY TIMES
ANGLO American’s credit rating was cut to junk by Moody’s Investors Service, which said slumping commodity prices had damaged its ability to pay down debt.
"The company now faces a higher business risk due to deterioration in commodities market conditions, and a longer and more uncertain deleveraging period than previously expected," Moody’s said in a statement on Monday.
London-based Anglo is seeking to turn around its fortunes with a drastic downsizing plan. The company is set to report full-year results on Tuesday and update investors on its move to reduce by more than half the number of mines it owns and eventually lower employee numbers to 50,000 from 135,000. Anglo lost 75% of its market value last year as investors questioned its survival given billions in debt and metal prices at six-year lows.
The credit downgrade "reflects a significant deterioration" in Anglo’s debt capacity and that Moody’s does not expect Anglo to deliver a substantial debt reduction in the next two years, according to the statement. There is a risk that Anglo’s iron-ore business could deteriorate further, Moody’s said.
In December, Anglo’s chief financial officer Rene Medori said any downgrade would not impact the cost of financing or the way Anglo runs its business.
Moody’s put Anglo on review for a downgrade in December because of slumping commodity prices and its plans to reduce production.
Bloomberg
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