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
....Senior Unsecured Regular Bond/Debenture
Baa3, Placed on Review for Downgrade
..Issuer: Barrick Gold Corporation
....Senior Unsecured Regular Bond/Debenture
Baa3, Placed on Review for Downgrade
..Issuer: Barrick International Bank Corp.
....Senior Unsecured Regular Bond/Debenture
Baa3, Placed on Review for Downgrade
..Issuer: Barrick North America Finance LLC
....Senior Unsecured Regular Bond/Debenture
Baa3, Placed on Review for Downgrade
..Issuer: Barrick Gold Finance Company
....Senior Unsecured Regular Bond/Debenture
Baa3, Placed on Review for Downgrade
..Issuer: Placer Dome Inc.
....Senior Unsecured Regular Bond/Debenture
Baa3, Placed on Review for Downgrade
..Issuer: Eldorado Gold Corporation
.... Probability of Default Rating Ba3-PD,
Placed on Review for Downgrade
.... Corporate Family Rating Ba3 , Placed
on Review for Downgrade
....Senior Unsecured Regular Bond/Debenture
Ba3 , Placed on Review for Downgrade
..Issuer: Goldcorp Inc.
.... Issuer Rating Baa2, Placed on Review
for Downgrade
....Senior Unsecured Regular Bond/Debenture
Baa2, Placed on Review for Downgrade
....Senior Unsecured Shelf (P)Baa2,
Placed on Review for Downgrade
..Issuer: HudBay Minerals, Inc.
.... Probability of Default Rating B3-PD,
Placed on Review for Downgrade
.... Corporate Family Rating B3, Placed
on Review for Downgrade
....Senior Unsecured Regular Bond/Debenture
B3, Placed on Review for Downgrade
..Issuer: IAMGOLD Corp. (IAG)
.... Probability of Default Rating B2-PD,
Placed on Review for Downgrade
.... Corporate Family Rating B2, Placed
on Review for Downgrade
....Subordinate Regular Bond/Debenture B3,
Placed on Review for Downgrade
..Issuer: Kinross Gold Corporation
.... Probability of Default Rating Ba1-PD,
Placed on Review for Downgrade
.... Corporate Family Rating Ba1, Placed
on Review for Downgrade
....Senior Unsecured Regular Bond/Debenture
Ba1, Placed on Review for Downgrade
..Issuer: Lundin Mining Corporation
.... Probability of Default Rating Ba2-PD,
Placed on Review for Downgrade
.... Corporate Family Rating Ba2, Placed
on Review for Downgrade
....Senior Secured Regular Bond/Debenture
Ba2, Placed on Review for Downgrade
..Issuer: New Gold Inc.
.... Probability of Default Rating B1-PD,
Placed on Review for Downgrade
.... Corporate Family Rating B1, Placed
on Review for Downgrade
....Senior Unsecured Regular Bond/Debenture
B2, Placed on Review for Downgrade
..Issuer: Taseko Mines Limited
.... Probability of Default Rating B3-PD,
Placed on Review for Downgrade
.... Corporate Family Rating B3, Placed
on Review for Downgrade
....Senior Unsecured Regular Bond/Debenture
B3, Placed on Review for Downgrade
....Senior Unsecured Shelf (P)B3 , Placed
on Review for Downgrade
..Issuer: Teck Resources Limited
.... Probability of Default Rating Ba3-PD,
Placed on Review for Downgrade
.... Corporate Family Rating Ba3, Placed
on Review for Downgrade
....Senior Unsecured Regular Bond/Debenture
Ba3, Placed on Review for Downgrade
....Senior Unsecured Shelf (P)Ba3, Placed
on Review for Downgrade
..Issuer: Yamana Gold, Inc.
....Senior Unsecured Regular Bond/Debenture
Baa3, Placed on Review for Downgrade
Outlook Actions:
..Issuer: Alamos Gold Inc.
....Outlook, Changed To Rating Under
Review From Positive
..Issuer: Barrick (PD) Australia Finance Pty Ltd
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Barrick Gold Corporation
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Barrick International Bank Corp.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Barrick North America Finance LLC
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Barrick Gold Finance Company
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Placer Dome Inc.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Eldorado Gold Corporation
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Goldcorp Inc.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: HudBay Minerals, Inc.
....Outlook, Changed To Rating Under
Review From Positive
..Issuer: IAMGOLD Corp. (IAG)
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Kinross Gold Corporation
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Lundin Mining Corporation
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: New Gold Inc.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Taseko Mines Limited
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Teck Resources Limited
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Yamana Gold, Inc.
....Outlook, Changed To Rating Under
Review From Stable
RATINGS RATIONALE
As part of an ongoing assessment of mining companies, Moody's sharply
reduced its price sensitivity assumptions on December 8, 2015.
Since then, credit conditions in the mining industry have weakened
further, with prices continuing to decline. The likelihood
has increased that prices for base metals, precious metals,
iron ore and metallurgical coal will approach levels closer to Moody's
stressed sensitivity scenario. In addition, the strong US
dollar is a further factor contributing to weakening demand and driving
prices lower since most metals are traded in dollars.
This broad ratings review will consider each mining company's asset base,
cost structure, likely cash burn and liquidity, as well as
management's strategy for coping with a prolonged downturn and the ability
to execute on same. The review will assess each company's cash
flow and credit metrics closer to our latest stressed price assumptions
and the relative rating positioning. Moody's expects to conclude
most reviews within a relatively short timeframe.
Moody's believes that this downturn will mark an unprecedented shift
for the mining industry. Whereas previous downturns have been cyclical,
the effect of slowing growth in China indicates a fundamental change that
will heighten credit risk for mining companies. This review reflects
the belief that deteriorating industry fundamentals require a recalibration
of the global mining portfolio rated by Moody's. The agency expects
that it will downgrade most companies' ratings by at least one notch
and believes that many of the issuers ratings could have multi-notch
declines. While this review focuses on companies rated in the range
from A1 to B3, Moody's will continue to assess the credit metrics
of all rated companies in the mining sector.
The principal methodology used in these ratings was Global Mining Industry
published in August 2014. Please see the Credit Policy page on
www.moodys.com for a copy of this methodology.
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.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead analyst and the Moody's legal entity that has issued the ratings.
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
(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 places 12 mining companies rated in Canada on review for downgrade
