Moody's may lower Falconbridge

Moody's Investors Service said it placed the Baa3 senior unsecured debt rating of Falconbridge Ltd. under review for possible downgrade.

Moody's said the review was prompted by the announcement by Xstrata plc that it is making a $14.6 billion unsolicited cash offer for all of the shares of Falconbridge that it does not already own.

The offer will be initially funded by debt, and Moody's said it is concerned that a portion of the acquisition debt will ultimately be supported by Falconbridge, resulting in credit metrics that may no longer support Falconbridge's existing rating.

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