Fitch changes Volcan view to stable

Fitch Ratings said it affirmed Volcan Compania Minera SAA’s long-term foreign and local currency issuer default rating at BBB- and the BBB- rating on its $600 million senior unsecured 5 3/8% notes due 2022.

The outlook was revised to stable from negative.

Fitch said the stable outlook reflects the company's improved financial performance following successful reductions in its cash costs, coupled with lowered capital investments resulting in improved credit metrics during 2016.

Volcan's recovering capital structure has started to stabilize despite a period of weak commodity prices during the nine months ended Sept. 30, 2016, with zinc, copper and lead prices down 4.7%, 16.4% and 2.4%, respectively, partially offset by a 5.6% improvement in silver prices compared to the prior year period.

Fitch said it believes measures taken by Volcan are sustainable over the medium-term, with net leverage being maintained at or below 2.5 times over the projected period.

The agency calculated adjusted leverage was 2.7 times as of Sept. 30 and expects stronger performance during the 2016 fourth quarter as price hedges dropped off during August.

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