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Canadian Mining and Metals Credit Quality Challenged May 01
Standard & Poors, May 2001
Abstract
The credit quality of Canadian mining and metals companies is being negatively affected by low prices in the gold, uranium, and steel sectors. Low prices lead to depressed financial results and ultimately weaker business positions when companies have less cash flow to reinvest in their operations. In addition, the slowdown in the economy is leading to softening demand and lower cyclical prices, primarily for base metals and the steel sector. Further, high energy costs are hitting all sectors, but in particular integrated steels. On the positive side, consolidation in the aluminum, copper, and zinc sectors is resulting in companies with stronger business and financial profiles. Further, several companies have made capital investments for modernizations, expansions, and new projects, and, although...
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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