Glencore's Credit Rating Cut to Just Above Junk
February 04 2016 - 10:20AM
Dow Jones News
LONDON—Commodities titan Glencore PLC suffered a fresh blow
Thursday when Standard & Poor's Ratings Services downgraded its
investment-grade credit rating to just one notch above junk status
over fears the commodity price rout will continue.
The credit-ratings firm downgraded the Switzerland-based miner
and trader by one notch to BBB- from BBB. The downgrade reflects
renewed uncertainty about the company's operating performance this
year and next. It follows S&P's decision to lower its price
assumptions for some of Glencore's key products, including copper,
zinc and nickel.
"We believe that commodity prices will remain very unsettled
while the impact of China's slowdown plays out," said S&P in a
statement. "This environment results in reduced visibility of
future profits for Glencore and its peers."
S&P also this week lowered the credit rating for
Anglo-Australian mining titan BHP Billiton Ltd., the world's
largest miner by market value, and the world's largest iron ore
producer Brazilian miner Vale SA last week.
Glencore, the world's largest thermal coal exporter by volume,
moved to safeguard its credit rating last year with a plan to
reduce its net debt by more than $10 billion, to between $18
billion to $19 billion, by the end of this year.
Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
February 04, 2016 10:05 ET (15:05 GMT)
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