S&P lifts Petra Diamonds view to stable

S&P said it revised its outlook to stable from negative on Petra Diamonds Ltd. and affirmed the B+ long-term corporate credit rating on the company.

At the same time, S&P affirmed the B+ issue rating on the $300 million senior secured second-lien notes issued by finance company Petra Diamonds US Treasury plc. The 4 recovery rating on these notes remained unchanged, indicating an expectation of average recovery of 35%.

“The rating actions reflects our view that over the past calendar year diamond prices have remained relatively flat and Petra's diamond production volumes have increased (by 24% year on year for the six months to Dec. 31, 2016, and by 16% for fiscal year ending June 30, 2016). The increased production volume is due to the direct access to the undiluted ore from the C-Cut area at the Cullinan mine and the sourcing of diamonds from the recently acquired tailings operations of Ekapa Mining and Kimberley Mines, which were combined with the company's existing Kimberley Underground mine,” S&P said in a news release.

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