Moody’s downgrades Iamgold, notes

Moody's Investors Service said it downgraded Iamgold Corp.’s corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD and senior subordinate notes rating to B2 (LGD5) from B1 (LGD4).

The company's speculative grade liquidity rating was affirmed at SGL-2 and the outlook remains negative.

"We downgraded Iamgold's rating to B1 to reflect the company's expected increase in exposure to gold price volatility and greater concentration of its cash flows from countries that have relatively high geopolitical risks," Moody's vice president and senior credit officer Darren Kirk said in a news release, explaining that the development follows Iamgold's agreement to sell its Canadian-based niobium operations for cash proceeds of $500 million.

"While the sale of Niobec will temporarily boost the company's liquidity, there is uncertainty associated with Iamgold plans to redeploy these funds in yet-to-be identified gold assets at a time when the price of gold is relatively weak."

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