TEXT-S&P comments on Barrick Gold Corp
June 6 - Standard & Poor's Ratings Services today said that its ratings on Barrick Gold Corp. (A-/Negative/A-2) are not immediately affected by the company's announced change of CEO. Our negative outlook incorporates credit measures that are weak for the ratings, largely a function of the debt-financed acquisition of Equinox Minerals Ltd. in 2011. Barrick's debt to EBITDA remains only slightly below our key 2x threshold for the 'A-' rating, while funds from operations to debt is well below the expected 45%, although these measures are both buffered somewhat by the company's large cash balances. As such, the ratings could come under pressure if the company emphasizes shareholder-friendly financial policies at the expense of its credit profile, particularly considering Barrick's reliance on strong metals prices to offset record-high debt levels and capital expenditures.
- Tweet this
- Share this
- Digg this