DBRS lowers Noranda

DBRS said it downgraded the issuer rating of Noranda Operating Trust from BBB under review with developing implications to BB (high) with a stable trend, following the trust's recent announcements regarding its refinancing efforts.

Although the trust's zinc concentrate processing operations have been running at close to capacity levels and generating solid earnings and cash flows since October 2009, it continues to face delays in renewing its long-term financing structure, the agency said.

These delays arise in the light of competing interests of the unitholders of its parent, the Noranda Income Fund, that seek restoration of the fund's distributions and the need to reduce long-term debt levels in advance of the potential expiry in May 2017 of the trust's concentrate supply and processing agreement with Xstrata Canada Ltd., the agency stated.

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