Loading ...Moody’s downgrade reviews miners
IS BOTTOM IN FROM CONTRARY POINT OF VIEW???? ONCE THE STREET START REVIEWING THE PITFALL IN A SECTOR BOTTOM IS NOT TOO FAR.???????Hmmmmmmmm.\——————-
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Rating Action: Moody’s places 12 mining companies rated in Canada on review for downgrade
Global Credit Research – 21 Jan 2016
Toronto, January 21, 2016 — Moody’s Investors Service has placed the ratings of 12 mining companies rated in Canada and their rated subsidiaries, on review for downgrade. A complete set of companies and rating actions is listed below.
The actions reflect Moody’s effort to recalibrate the ratings in the mining portfolio to align with the fundamental shift in the credit conditions of the global mining sector.
“Slowing growth in China, which consumes and produces at least half of base metals, and is a material player in the precious metals, iron ore and metallurgical coal markets is weakening demand for these commodities and driving prices to multi-year lows,” says Jamie Koutsoukis, a Moody’s VP – Senior Analyst. “China’s outsized influence on the commodities market, coupled with the need for significant recalibration of supply to bring the industry back into balance indicates that this is not a normal cyclical downturn, but a fundamental shift that will place an unprecedented level of stress on mining companies.”
On Review for Downgrade:
..Issuer: Alamos Gold Inc.
…. Probability of Default Rating B2-PD, Placed on Review for Downgrade
…. Corporate Family Rating B2, Placed on Review for Downgrade
….Senior Secured Regular Bond/Debenture B3, Placed on Review for Downgrade
..Issuer: Barrick (PD) Australia Finance Pty Ltd
….and more
Ah yes, the rating’s agencies – always behind the curve. Another *potential* sign the bottom may be in!
What about their paragraph RATINGS RATIONALE? They are thinking that this is a secular, well, ‘fundamental’ change rather than a ‘cyclical’ change.
It sounds like they are ringing the bell for a dead supercycle.
daboyz timed it well. their mates had all this info last week i reckon, hence the neckline break recently, despite gold rising. bottom line: avoid the majors. stick with the mid-tiers with good balance sheets….LSG, RIC, CRJ etc. The majors are paying the price for being so reckless for buying inflated assets at the top of the last cycle, using borrowed money. they will continue to under perform the well managed juniors. Interestingly, the AUS gold miners are mostly in good shape and have none of these issues that the Canadian majors are having.