Wednesday, May 18, 2011

Barrick Gets Reviewed By Moody's, With No Change In Rating

Recently, Barrick's planned debt-financed $7.3 billion takeover of Equinox Minerals got Moody's on its guard. The debt-rating agency put the mining company on its review list, but completed the review with no change in Barrick's rating. Its debt is still rated at Baa1, barely investment grade but still in that zone.
“The confirmation of Barrick's Baa1 rating reflects Moody's expectation that the company's debt protection metrics and leverage, while tightened as a result of the Equinox acquisition, will remain within acceptable ranges,” Moody’s said.
Although its debt-to-EBITDA ratio will go from 1.1 to 2 as a result of the acquisition, Moody's believes the company's liquidity and strong gold prices will enable Barrick to shoulder the additional debt about as easily as it's shouldering its present debt.

That's good news for Barrick. There was a bit of a scare when the ratings review was announced, but it's now over.

No comments:

Post a Comment