S&P downgrades Gold Fields
Standard & Poor's Ratings Services has lowered its long- and short-term corporate credit ratings on gold miner Gold Fields Ltd. (GFI) to 'BB+/B' from 'BBB-/A-3'.
The rating agency has also lowered its long- and short-term South Africa national scale ratings on GFI to 'zaA/zaA-2' from 'zaAA-/zaA-1'.
“At the same time we removed all the ratings from CreditWatch‚ where they were placed with negative implications on Oct. 17‚ 2012. The outlook is stable‚” S&P said.
“In addition‚ we lowered our issue rating on GFI's $1 billion senior unsecured notes to 'BB+' from 'BBB-'. We assigned a recovery rating of '3' to this debt‚ indicating our expectation of meaningful (50%-70%) recovery in the event of a payment default‚” the rating agency stated.
Citing its reasons for the downgrade‚ S&P said: “We believe that South African gold miner Gold Fields Ltd. (GFI) faces increased country risk in light of increasing social and political tensions.
“ We have revised downward our assessment of GFI's business risk profile to "fair" from "satisfactory" to reflect the increase in country risk in South Africa‚ and GFI's higher unit cash costs than peers.
“The stable outlook‚” it added‚ “reflects our opinion that GFI's financial risk profile will maintain robust‚ benefiting from the currently healthy gold prices‚ modest leverage‚ GFI's "strong" liquidity position‚ and its conservative financial policy.” - I-Net Bridge