Moody’s downgrades several Peru mining companies

Moody’s Investors Service said it downgraded several Peruvian mining companies, along with their debt, due to increased credit risks perceived for the mining sector.

The downgraded companies include Hochschild Mining plc, Compania Minera Ares SAC, Minsur SA and Volcan Compania Minera SAA.

Based on a review of the sector, Moody’s said the downgrades incorporate a deep deterioration in credit conditions for the global mining industry with prices continuing to decline.

The agency said it believes this downturn will be deeper and longer than expected and represent an unprecedented shift in the mining industry.

China’s slowing economic growth brings additional market imbalances and requires further adjustments in the industry, including in supply levels, Moody’s added.

The agency also said the strong U.S. dollar is a further factor contributing to weakening demand and driving prices lower, since most metals are traded in dollars.

Deteriorating industry fundamentals required the recalibration of the global mining portfolio, Moody’s said.

Hochschild Mining’s corporate family rating was downgraded to B2 from Ba3. Hochschild’s downgrade reflects the deterioration in the company’s credit metrics through 2015 as a result of weak commodity prices, namely in silver and gold, Moody’s said.

Compania Minera Ares’s senior unsecured regular bond/debenture was downgraded to B2 from Ba3.

Minsur’s corporate family rating was downgraded to Ba3 from Ba1 and its senior unsecured regular bond/debenture was lowered to Ba3 from Ba1. Minsur’s downgrade reflects the deterioration in market fundamentals for tin without prospects of a rapid recovery, the agency said, and the consequent pressure on the company´s credit metrics.

Volcan Compania Minera’s corporate family rating was downgraded to B2 from Ba1 and its senior unsecured regular bond/debenture was lowered to B2 from Ba1. Volcan’s downgrade considers the pressure in the company’s credit metrics from deteriorating market conditions, but its ratings still reflect its good mine diversity and position globally as a leading producer of zinc, silver and lead.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.