S&P Takes Various Rtg Actions on Gold Mining Companies
08:17 p.m Dec 05, 1997 Eastern
NEW YORK--(BUSINESS WIRE)--Dec. 5, 1997--Reflecting the recent
deterioration in gold prices, coupled with the possibility of a
sustained period of continued weak prices, Standard & Poor's has taken
the following rating actions:
-- Echo Bay Mines Ltd.: Corporate credit rating lowered to
double-'B'-minus from double-'B'; senior subordinated debt rating
lowered to single-'B'-plus from double-'B'-minus. Ratings placed on
CreditWatch with negative implications.
-- Royal Oak Mines, Inc.: Corporate credit rating lowered to single-'B'
from single-'B'-plus; senior subordinated debt rating lowered to
triple-'C'-plus from single-B-minus. Ratings placed on CreditWatch with
negative implications.
-- Newmont Mining Co.: Triple-'B'-plus corporate credit rating placed on
CreditWatch with negative implications. Newmont Gold Co.:
Triple-'B'-plus corporate credit, equipment trust certificates, and
senior unsecured debt ratings placed on CreditWatch with negative
implications. Santa Fe Pacific Gold Corp.: Triple-'B'-plus senior
unsecured debt rating placed on CreditWatch with negative implications.
-- Homestake Mining Co.: Triple-'B' corporate credit and
triple-'B'-minus subordinated debt ratings placed on CreditWatch with
negative implications.
-- Battle Mountain Gold Co.: Double-'B' corporate credit and bank loan
ratings, and single-'B'-plus preferred stock rating placed on
CreditWatch with negative implications.
-- Agnico Eagle Mines Ltd.: Single-'B'-plus corporate credit rating and
single-'B'-plus senior unsecured debt rating placed on CreditWatch with
negative implications.
-- Placer Dome, Inc.: Triple-'B' corporate credit and senior unsecured
debt ratings, triple-'B'-minus preferred stock rating, and 'A-2'
commercial paper rating affirmed. Outlook revised to negative from
stable.
-- Amax Gold, Inc.: Double-'B' corporate credit rating and single-'B'
preferred stock rating affirmed. Outlook revised to negative from
stable.
Gold prices have deteriorated precipitously through 1997, falling to a
12 1/2-year low of below $300/oz last week. The price weakness has been
driven primarily by central bank actions and a low inflationary
environment, as well as the recent turmoil in Asian markets. Although
considerable uncertainty exists regarding the direction of gold prices,
the recent weakness could be prolonged and hence, continue to adversely
impact the credit quality of the above companies. Standard & Poor's
expects to conclude its review of the company's placed on CreditWatch
within the next two to three months.
Standard & Poor's ratings and outlooks on the following companies were
not affected, for various reasons as stated below:
-- Barrick Gold Corp. (single-'A' corporate credit rating, stable
outlook), given its low cost structure, significant hedge position, and
substantial financial flexibility, including a large cash position.
-- Normandy Mining Ltd. (triple-'B'-minus corporate credit rating,
stable outlook), given its significant hedge position.
-- Hecla Mining Co. (single-'B'-plus corporate credit rating, stable
outlook), as its product diversification affords some protection against
gold
price volatility, and its financial flexibility is expected to remain
consistent with its current rating.
-- Coeur D'Alene Mines Co. (single-'B' corporate credit rating, negative
outlook), given its product diversity. Although lower gold prices could
well further hinder assumed improvement in its financial performance,
its negative outlook already underscores the challenges it faces.
-- CreditWire (See also: businesswire.com)
Copyright 1997, Business Wire |
