Fitch affirms Molymet

Fitch Ratings said it affirmed Molibdenos y Metales SA's (Molymet) foreign- and local-currency issuer default ratings at BBB, national scale rating at A+(cl), senior unsecured rating at A+(cl) and certificados bursatiles at AA+(mex).

The outlook is stable.

The affirmation reflects the company's conservative capital structure and ability to successfully maneuver through the tough operating conditions of last year when molybdenum prices averaged a five-year low, according to the agency.

Further supporting the ratings is Molymet's strong cash position and manageable amortization profile as well as it leading market position, the agency said.

The company has a net debt to last 12 months EBITDA at 0.8x for the first quarter of 2010. The ratio may rise to the last five-year average net debt-to-EBITDA level of about 1.2x, as prices recover and cash is used for working capital, Fitch noted.

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