S&P upgrades Alamos Gold

S&P said it raised the long-term corporate credit rating on Alamos Gold Inc. to B+ from B, along with the rating on its senior secured notes to BB- from B+.

The recovery rating on the notes is unchanged at 2.

S&P also said it revised the financial risk profile on the company to significant from aggressive.

The upgrade primarily reflects the improved prospects for Alamos's earnings and cash flow generation following higher year-to-date gold prices and the upward revision to the price assumptions through 2018, the agency said.

The company is estimated to generate an adjusted debt-to-EBITDA ratio in the low 2x range in 2016 and 2017, which is well below the previous upgrade trigger, S&P said.

Based on the strength of the company’s prospective credit measures and its cash position, the agency said it believes there is a sufficient cushion to manage the risks associated with gold price volatility and high estimated development-related capital expenditures at the current rating.

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