Moody’s cuts BHP ratings

IOL pic feb23 bhp billiton logo red white REUTERS File picture: David Gray, Reuters

London - Credit ratings agency Moody's Investors Service cut its ratings on BHP Billiton to “A3” from “A1”, citing a deterioration in the company's earnings and cash flow, and said the outlook on the ratings was negative.

A slump in the prices of commodities such as copper and iron ore has put the balance sheets of miners the world over under strain.

Moody's said it expected BHP's credit metrics to remain substantially weaker as low commodity prices and softer demand fail to offset changes in the company's dividend policy.

BHP abandoned its progressive dividend policy and slashed its interim dividend by nearly three quarters last week in order to conserve cash.

The miner has long maintained that a solid “A” level credit rating is its top priority. It said it had $25.9 billion of debt at the end of 2015.

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Last month, Standard & Poor's also cut the company's debt ratings to “A” from “A+”.

Shares of the company were up 3.8 percent at 808.4 pence at 1124 GMT on the London Stock Exchange, lagging a 4.5 percent gain in the FTSE 350 Mining Index.

REUTERS

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