Moody's may cut Barrick Gold

Moody's Investors Service said it placed the Baa1 rating of Barrick Gold Corp. and the Baa1 backed ratings of all subsidiary issuers under review for possible downgrade.

The review follows Barrick's offer to acquire Equinox Minerals Ltd. in an all-cash transaction worth about $7.7 billion, Moody's said.

The acquisition will be financed through a combination of cash on hand and $5 billion in new credit facilities, the agency said.

Pro-forma for the transaction, Moody's said the company's debt-to-EBITDA ratio is expected to be 2.3x compared to 1.1x at year-end 2010.

The review will focus on the earnings and cash flow to be generated from the acquisition and include an analysis of production levels and costs, the agency said.

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