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Rating Action:

Moody's Affirms IAMGOLD's Ba3 CFR; Outlook to Negative

Global Credit Research - 19 Mar 2014

US $650 million of Debt Affected.

NOTE: On June 01, 2014, the press release was revised as follows: In the Regulatory Disclosures section, added the Canada Ancillary Disclosure as the fourth paragraph. Revised release follows.

Toronto, March 19, 2014 -- Moody's Investors Service affirmed IAMGOLD Corporation's Ba3 corporate family rating (CFR), Ba3-PD probability of default rating, B1 senior subordinate notes rating and SGL-2 speculative grade liquidity rating. The company's ratings outlook was changed to negative from stable.

Affirmations:

.... Corporate Family Rating, Affirmed Ba3

.... Probability of Default Rating, Affirmed Ba3-PD

.... Speculative Grade Liquidity Rating, Affirmed SGL-2

....Senior Subordinate Regular Bond/Debenture Oct 1, 2020, Affirmed B1

Outlook Actions:

....Outlook, Changed To Negative From Stable

RATINGS RATIONALE

"The change in IAMGOLD's outlook reflects our view that the company's relatively high cash costs could continue to increase over the next few years as it processes a greater amount of harder ore at its two largest gold mines", said Darren Kirk, Moody's vice president and senior credit officer. "As well, execution risks to ramping up production at its Westwood underground operations in Canada have persisted longer than we previously expected, and any further delays would have adverse implications on IAMGOLD's cost position and business profile", added Kirk.

IAMGOLD's Ba3 CFR is driven by the company's significant exposure to gold price volatility coupled with the elevated political risk in the regions where the majority of its cash flows are generated (mainly Burkina Faso and Suriname). Relatively high cash costs and negative free cash flow associated with investments to grow and diversify its narrow production profile also weigh on the rating while the short reserve lives of its gold mines provide an added constraint. Favorably, the rating considers the company's good liquidity, diversity provided by its exposure to niobium production in a stable mining jurisdiction (Canada) and Moody's belief that the company's adjusted leverage (Debt/ EBITDA) is likely to remain below 3.5x through 2014 incorporating a forward gold price sensitivity of $1,100/oz.

The negative outlook reflects Moody's view that the increase in ore hardness at the company's Essakane and, particularly, Rosebel mines will increasingly challenge IAMGOLD's ability to control costs over the next few years. The outlook also incorporates ongoing execution risks to ramping up production at Westwood's underground operations.

The rating could be upgraded if IAMGOLD achieves greater mine diversity and reduced reliance on countries that have elevated political/economic risks. IAMGOLD's leverage would also need to be maintained below 2.5x.

The rating could be downgraded if Moody's expects cost pressures at the company's owner-operated gold mines to continue beyond 2014, if Moody's expected the company's adjusted debt/EBITDA to be sustained above 3.5x or should Moody's believe the company's liquidity position would materially contract.

Headquartered in Toronto, Canada, IAMGOLD, owns gold mines in Suriname (95%), Burkina Faso (90%) and Canada. The company also owns approximately 41% of a gold mine in Mali and 100% of a niobium mine in Canada. The company sold about 928 thousand gold equivalent ounces in 2013.

The principal methodology used in this rating was the Global Mining Industry published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Moody’s has not provided advisory services but may have provided Ancillary or Other Permissible Service(s) to the rated entity, its related third parties and/or the party that requested the rating within the past two years (including during the most recently ended fiscal year). Please see the special report “Ancillary or other permissible services provided to entities rated by MIS’s credit rating agency in Canada” on the ratings disclosure page www.moodys.com/disclosures on our website for further information.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Darren M. Kirk
VP - Senior Credit Officer
Corporate Finance Group
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
(416) 214-1635

Donald S. Carter, CFA
MD - Corporate Finance
Corporate Finance Group
(416) 214-1635

Releasing Office:
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
(416) 214-1635

Moody's Affirms IAMGOLD's Ba3 CFR; Outlook to Negative
No Related Data.
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