info

Yes No
Moodys.com
Terms of Use
REGULATORY AFFAIRS
CAREERS
DIVERSITY & INCLUSION
.
ABOUT US
.
CONTACT US
HOME
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Can't read?
Try a new set
Send Cancel
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
OK
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
OK
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's downgrades AngloGold Ashanti to Baa3; negative outlook

12 Jul 2013

Approximately $1.75 billion of debt affected

London, 12 July 2013 -- Moody's Investors Service has today downgraded the issuer rating of AngloGold Ashanti Limited (AGA) to Baa3 from Baa2. Concurrently, Moody's has downgraded the senior unsecured debt obligations of AGA's guaranteed subsidiary, AngloGold Ashanti Holdings plc, to Baa3 from Baa2. The outlook on all ratings has been changed to negative from stable.

Downgraded:

..Issuer: AngloGold Ashanti Limited

.... Issuer Rating, Downgraded to Baa3 from Baa2

..Issuer: AngloGold Ashanti Holdings plc

....USD700m Senior Unsecured Regular Bond/Debenture Apr 15, 2020, Downgraded to Baa3 from Baa2

....USD750m Senior Unsecured Regular Bond/Debenture Aug 01, 2022, Downgraded to Baa3 from Baa2

....USD300m Senior Unsecured Regular Bond/Debenture Apr 15, 2040, Downgraded to Baa3 from Baa2

RATINGS RATIONALE

Today's downgrade to Baa3 from Baa2 primarily reflects the increased risk that AGA will no longer be able to sustain its credit metrics such that they are commensurate with a Baa2 rating under our current Moody's forecast assumptions.

The downgrade, and negative outlook, also reflect that only in 2014 will AGA realise the full benefits of many of the measures it is taking to reduce its cash outflows in response to lower gold prices, and that these remedial steps may not be sufficient to stabilise operating margins and operating cash flow, especially if the gold price continues to decline. In addition, the outlook factors an additional risk facing AGA of potential prolonged strike action at AGA's South African operations as a result of wage negotiations this year. Furthermore, the rollout of AGA's two key projects, Kibali and Tropicana, have continued to consume both internally generated cash and debt funding, albeit Moody's expects that both projects will come into production by the end of 2013 within budget. All of these factors may pressure AGA's liquidity profile over the next 12 months and place stress on the financial covenants contained in the company's banking facilities.

--RISK OF PROLONGED STRIKE ACTION--

Moody's expects the company to take proactive steps with regard to strengthening its liquidity profile to accommodate the potential for liquidity pressures as a result of possible strike action at its South African operations. While Moody's recognises a number of positive initiatives with regard to the wage negotiation process for AGA's South African gold mines, the negative rating outlook reflects that concerns still remain around the following: (1) the aggressive wage demands (60% increase) made for entry-level workers by the National Union of Mineworkers (NUM), which represents 65% of South African gold miners, and even more aggressive demands (100% increase) made for entry-level workers by the Association of Mineworkers and Construction Union (AMCU), which represents 17% of South African gold miners; and (2) the fact that AMCU is not yet a signatory to the framework agreement for a sustainable mining industry, which suggests that it may not conform to a smooth wage negotiation process.

Should there be protracted strike action at AGA's South African mines due to a failure in the wage negotiation process, Moody's expects that AGA's liquidity would come under strain and the potential loss in EBITDA would lead to net debt/EBITDA approaching the 3.0x trigger level set on the company's banking facilities. Covenant levels are reported at 30 June and 31 December each year using 12-month rolling EBITDA and debt as of the reporting period.

--INCREASED RISK OF DETERIORATING CREDIT METRICS--

Given AGA's current debt load and cost structure, coupled with its forecast capex spend and negative cash flow generation, Moody's expects that under the rating agency's forecast assumptions, the company's debt would rise over the next year and push its credit metrics beyond the levels appropriate for a Baa2 rating. Moody's notes that AGA's capex spend has pressured its free cash flow and debt, driven by the company's key projects, the Kibali joint venture in the Democratic Republic of Congo, and Tropicana in Australia. Moody's expects that, together, these projects will contribute approximately 600,000 ounces/annum from 2014 to AGA's production portfolio. While Moody's had previously factored that AGA would largely fund project capex with internal cash flow generation, the company has had to apply more debt to these projects than originally planned, given its lower cash flow generation due to the current adverse gold price environment.

The negative outlook factors that AGA's liquidity profile has weakened due to the capex requirements of Tropicana and Kibali and the need to ensure that they come on stream according to plan. However, the rating agency expects AGA will take proactive steps with regard to restoring its liquidity profile to its previous position following this capex spend. In Moody's view, it will be important for AGA to deliver these projects in a timely manner, both from a EBITDA/cash flow generation perspective and lowering the cost profile of its production portfolio, especially in light of the lower gold price environment.

--INITIATIVES IN RESPONSE TO A LOWER GOLD PRICE ENVIRONMENT--

Despite today's downgrade, Moody's takes comfort from a number of initiatives that AGA is currently, and will be undertaking in response to the lower gold price environment, such as: (1) orientating its operations to mine higher grades, thereby reducing costs and enhancing cash flow generation; (2) reducing corporate and capacity-building costs; (3) reducing exploration expenditures and feasibility study costs; and (4) postponing non-anchor growth projects. Moody's expect the impact of these measures to filter through into credit metrics during 2014. However, uncertainty remains regarding the execution of these initiatives and the rating agency will continue to monitor whether the quantum and timing of such measures will be sufficient to sustainably protect the company's credit metrics such that they are commensurate with its Baa3 rating.

--Baa3 RATING--

AGA's Baa3 rating is supported by the company's position as the third-largest gold producer globally, with a sizeable reserve base. It also positively reflects the company's good geographic diversity, having 21 operations in 10 different countries and four separate continents. In addition, the rating is supported by a management team that remains committed to a transparent and conservative financial approach, which Moody's expects will ensure that necessary measures will be taken to preserve liquidity and reduce operating and capex costs should gold prices remain at today's levels.

WHAT COULD STABILISE THE OUTLOOK

Moody's will consider stabilising the outlook on AGA's rating if: (1) the wage negotiation process at its South African mining operations is concluded in such a way the company's liquidity profile and credit metrics remain commensurate with its Baa3 rating; (2) the company takes proactive measures to strengthen its liquidity profile, which would address concerns around potential covenant breaches that could result from a protracted strike action at its mines; and (3) it successfully brings the Tropicana and Kibali projects on stream within its envisaged timeline and budget.

WHAT COULD CHANGE THE RATING UP/DOWN

Downward pressure on AGA's rating would likely arise due to heightened operating risk in any of its operating assets that leads to a material deterioration in operating performance. The rating would also come under negative pressure if the company was unable to adjust its cost base in light of lower gold prices such that: (1) total debt/EBITDA exceeds 3.25x; (2) cash flow from operations minus dividends/debt falls below 20%; and (3) its liquidity profile weakens materially.

Given the negative outlook, upward pressure on AGA's rating will remain limited in the short to medium term. However, Moody's anticipates that AGA's total cash cost positioning and credit metrics will improve once its key projects in Kibali and Tropicana come on stream, both of which are expected to have total cash costs lower than the company's current total cash cost of USD894/ounce as of 31 March 2013. Longer term, upward rating pressure could occur if AGA's: (1) debt/EBITDA is sustainably less than 2.0x under Moody's forecast assumptions; (2) cash flow from operations minus dividends/debt exceeds 30% on a sustainable basis; (3) AGA is able to sustainably generate possitive free cash flow; and (4) liquidity is robust.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was the Global Mining Industry published in May 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Headquartered in South Africa, AngloGold Ashanti Limited is a global gold mining company operating out of 21 locations in Southern and Continental Africa, North and South America, and Australia. With production of 3.944 million ounces of gold and preliminary revenues of USD6.1 billion for the 12 months ended 31 March 2013, AGA ranks as the world's third-largest gold producer. In South Africa (31% of production), AGA has six deep-level operations and two surface operations, while most of its operations in other countries are open pit. The company is listed on the New York, Johannesburg, Ghanaian, London and Australian stock exchanges.

The Local Market analyst for this rating is Dion Bate, 27.11.217.5472.

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.

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.

Gianmarco Migliavacca
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

David Staples
MD - Corporate Finance
Corporate Finance Group
Telephone: 00971 4237 9536

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's downgrades AngloGold Ashanti to Baa3; negative outlook
No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
Moodys.com