Toronto, February 26, 2019 -- Moody's Investors Service ("Moody's") today changed Barrick Gold Corporation's
(Barrick) outlook to developing from stable. At the same time,
Moody's affirmed the senior unsecured ratings of Barrick and all rated
subsidiaries at Baa2. This follows the announcement that Barrick
Gold Corporation has made a proposal to merge with Newmont Mining Corporation
(Newmont) in an all-share transaction.
Affirmations:
..Issuer: Barrick (PD) Australia Finance Pty Ltd
....Gtd Senior Unsecured Regular Bond/Debenture,
Affirmed Baa2
..Issuer: Barrick Gold Corporation
....Senior Unsecured Regular Bond/Debenture,
Affirmed Baa2
..Issuer: Barrick Gold Finance Company
....Gtd Senior Unsecured Regular Bond/Debenture,
Affirmed Baa2
..Issuer: Barrick International Bank Corp.
....Gtd Senior Unsecured Regular Bond/Debenture,
Affirmed Baa2
..Issuer: Barrick North America Finance LLC
....Gtd Senior Unsecured Regular Bond/Debenture,
Affirmed Baa2
..Issuer: Placer Dome Inc.
....Senior Unsecured Regular Bond/Debenture,
Affirmed Baa2
Outlook Actions:
..Issuer: Barrick (PD) Australia Finance Pty Ltd
....Outlook, Changed To Developing From
Stable
..Issuer: Barrick Gold Corporation
....Outlook, Changed To Developing From
Stable
..Issuer: Barrick Gold Finance Company
....Outlook, Changed To Developing From
Stable
..Issuer: Barrick International Bank Corp.
....Outlook, Changed To Developing From
Stable
..Issuer: Barrick North America Finance LLC
....Outlook, Changed To Developing From
Stable
..Issuer: Placer Dome Inc.
....Outlook, Changed To Developing From
Stable
RATINGS RATIONALE
The developing outlook reflects 1) the uncertainty regarding the acceptance
by Newmont of the proposed merger 2) integration and execution risk surrounding
Barrick's recent aggressive execution strategy 3) Barrick's strategy
for the combined companies including potential dispositions, and
4) the financial and legal structure of the two companies.
Barrick (Baa2) benefits from its low adjusted leverage (1.8x proforma
its merger with Randgold at Q4/18), large scale (over 5mm ozs of
attributable gold), diverse and low-cost gold assets (~$650/gold-equivalent
ozs), and excellent liquidity. It is constrained by the volatility
of gold prices, geopolitical risk at some of its mine locations
and a recent aggressive acquisition strategy. Barrick's production
is expected grow in 2019 with the acquisition of Randgold having closed
on January 1, 2019 to 5.1-5.6 million attributable
ounces in 2019 (4.5 Moz in 2018 Barrick pre-Randgold),
however we expect leverage will remain below 2x based on expected strong
EBITDA and free cash flow generation.
The principal methodology used in these ratings was Mining published in
September 2018. Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Barrick Gold Corporation is one of the world's largest gold producers,
with mines in the US, Canada, Peru, Argentina,
Dominican Republic, Papua New Guinea, Australia and Africa,
and copper mines in Chile, Saudi Arabia and Zambia. Barrick
is headquartered in Toronto, Canada. Gold production in 2018
was 4.5 million attributable ounces and revenues were $7.2
billion for the year.
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 credit rating action on the support provider and in relation to
each particular credit 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 credit rating action,
and whose ratings may change as a result of this credit 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 ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
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.
Jamie Koutsoukis
Vice President - Senior Analyst
Corporate Finance Group
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Donald S. Carter, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653