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Industry Report Card: U.S. Metals & Mining Companies Show Ratings Strength, Face Business-Risk Challenges Aug 06
Standard & Poors, Aug 2006
Abstract
As metals prices continue their remarkable run-up, the credit ratings of metals and mining companies around the world have improved, albeit at a slowing rate. So far in 2006, Standard & Poor's Ratings Services has upgraded 14 issuers and downgraded eight. Ratings are benefiting from the combination of stronger operating cash flow sector-wide and issuer-specific measures to reduce debt burdens. Yet, ratings are becoming increasingly constrained by individual companies' business-risk profiles that reflect the highly competitive, volatile markets and other risks factored into these business risks. Furthermore, the strength of the metals cycle has generated exceptional liquidity for metal producers, compelling companies to engage in combinations of debt reduction, M&As, and shareholder-friendly initiatives. Although fundamentals remain sound for most metals,...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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