Moody's trims Volcan

Moody's Investors Service said it lowered Volcan Compania Minera SAA y Subsidiarias' corporate family rating and senior unsecured rating to B2 from B1. The outlook was changed to negative from stable.

“The downgrade of Volcan's ratings reflects the deterioration of the company's liquidity and credit metrics driven by negative free cash flow expected for 2023 and 2024 and incremental debt to fund the company's growth plan,” the agency said in a press release.

Moody’s said it projects Volcan needs to raise around $270 million, of which $170 million will be incremental to fund its growth and about $100 million to refinance debt due in 2024.

“While the company stated that it already engaged with market participants, Moody's believes that the announcement of Glencore plc (Glencore, Baa1 positive), its controlling shareholder, that it has commenced a process exploring the possible disposal of its 23.3% economic interest in Volcan, adds uncertainty to the already challenging operating and market environment,” the agency said in a press release.

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