Obbligazioni societarie HIGH YIELD e oltre, verso frontiere inesplorate - Vol. 1 (2 lettori)
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Rating Action: Moody's downgrades Cliffs' ratings -- CFR to Ba2; Ratings on review for further downgrade
Global Credit Research - 17 Oct 2014
Approximately $3 billion of debt downgraded
New York, October 17, 2014 -- Moody's Investors Service downgraded Cliffs Natural Resources (Cliffs) Corporate Family Rating (CFR) and Probability of Default Rating to Ba2 and Ba2-PD respectively. At the same time the rating on Cliffs' senior unsecured notes and senior unsecured shelf were downgraded to Ba2 and (P) Ba2 respectively. These ratings were placed on review for further downgrade. Meanwhile the Speculative Grade Liquidity Rating was lowered to SGL-3 from SGL-1.
Downgrades:
..Issuer: Cliffs Natural Resources Inc.
.... Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD; Placed Under Review for further Downgrade
.... Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-1
.... Corporate Family Rating, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Multiple Seniority Shelf (Local Currency) Feb 11, 2016, Downgraded to (P)Ba2 from (P)Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Jan 15, 2018, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Oct 1, 2020, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Oct 1, 2040, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Mar 15, 2020, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Apr 1, 2021, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
Outlook Actions:
..Issuer: Cliffs Natural Resources Inc.
....Outlook, Changed To Rating Under Review From Negative
RATINGS RATIONALE
The downgrade to a Ba2 CFR reflects our expectation that iron ore and coking coal prices will trade within lower price points and for a longer duration than previously anticipated. From January through September 2014 average seaborne iron ore prices have collapsed roughly 36% to an average low in September of approximately $82/metric ton (MT - 62%Fe China) with average prices between August and September falling around 11%. Given the slower steel production growth rates in China (2.6% through August), weakening economic indicators in Europe, and continued delivery of increased tons into an oversupplied iron ore market, we see no catalyst for meaningful improvement in iron ore prices, which are currently fluctuating around $80MT. We have recently revised our iron ore price sensitivities to a range of $75/MT - $85/MT (62% Fe). The seaborne coking coal market faces comparable pressures with the 4th quarter prices rolling over at about $119/MT, relatively unchanged from the prior two quarters.
Moody's notes that Cliffs has announced a roughly $6 billion after tax impairment charge that they anticipate taking in the third quarter on the seaborne iron ore and coal assets based upon the adverse market conditions for these commodities. While the impairment charge is non-cash, it virtually eliminates the company's equity position.
Although the company's US iron ore operations are contract based, with the seaborne price being one component of the pricing equation, we anticipate earnings to weaken in this segment. Cliffs' Asia Pacific operations and Eastern Canadian operations are more exposed to price movements in the seaborne market. We expect widening losses in the Canadian iron ore segment and contraction in the Asia Pacific segment, likely to a loss position over the next several quarters. We also anticipate continued losses in the US coal segment. Factoring these elements together with the expected lower price sensitivities, we believe that leverage will increase to over 4.5x by the end of 2014/first quarter of 2015.
The change in the speculative grade liquidity rating to SGL-3 reflects our expectation for decreasing cash flow generation and the potential impact of the impairment on the company's ability to comply with ithe debt/capital covenant in its $1.25 billion revolver. We expect the company to be able to resolve this issue.
The Ba2 rating on the senior unsecured instruments under Moody's loss given default methodology reflects the fact that virtually all debt is currently pari passu in the capital structure. We note that the most recent amendment to Cliffs' revolving credit facility requires that this facility be secured by June 30, 2015. The change in the mix of secured and unsecured debt in the capital structure change is likely to have a negative impact on the senior unsecured ratings.
The review for further downgrade reflects the likelihood of deterioration of performance greater than currently anticipated. The review also reflects the uncertainty surrounding the timing of any potential sale of the Asia Pacific or US coal assets, the likely proceeds that might be received and the application of proceeds from any asset sales. The review will focus on expected performance at various price points and the likely asset base and earnings potential relative to debt levels should the company sell its Asia Pacific operations and/or its US coal operations.
Headquartered in Cleveland, Ohio, Cliffs is the largest iron ore producer in North America and is also involved in the metallurgical coal business through its two coking coal mining complexes and to a lesser extent in thermal coal. In addition, the company participates in the international iron ore markets through its subsidiaries in Australia and Canada. For the twelve months ended June 30, 2014, the company had revenues of $5.1 billion.
The principal methodology used in this rating was Global Mining Industry published in August 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.
Global Credit Research - 17 Oct 2014
Approximately $3 billion of debt downgraded
New York, October 17, 2014 -- Moody's Investors Service downgraded Cliffs Natural Resources (Cliffs) Corporate Family Rating (CFR) and Probability of Default Rating to Ba2 and Ba2-PD respectively. At the same time the rating on Cliffs' senior unsecured notes and senior unsecured shelf were downgraded to Ba2 and (P) Ba2 respectively. These ratings were placed on review for further downgrade. Meanwhile the Speculative Grade Liquidity Rating was lowered to SGL-3 from SGL-1.
Downgrades:
..Issuer: Cliffs Natural Resources Inc.
.... Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD; Placed Under Review for further Downgrade
.... Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-1
.... Corporate Family Rating, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Multiple Seniority Shelf (Local Currency) Feb 11, 2016, Downgraded to (P)Ba2 from (P)Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Jan 15, 2018, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Oct 1, 2020, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Oct 1, 2040, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Mar 15, 2020, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
....Senior Unsecured Regular Bond/Debenture (Local Currency) Apr 1, 2021, Downgraded to Ba2 from Ba1; Placed Under Review for further Downgrade
Outlook Actions:
..Issuer: Cliffs Natural Resources Inc.
....Outlook, Changed To Rating Under Review From Negative
RATINGS RATIONALE
The downgrade to a Ba2 CFR reflects our expectation that iron ore and coking coal prices will trade within lower price points and for a longer duration than previously anticipated. From January through September 2014 average seaborne iron ore prices have collapsed roughly 36% to an average low in September of approximately $82/metric ton (MT - 62%Fe China) with average prices between August and September falling around 11%. Given the slower steel production growth rates in China (2.6% through August), weakening economic indicators in Europe, and continued delivery of increased tons into an oversupplied iron ore market, we see no catalyst for meaningful improvement in iron ore prices, which are currently fluctuating around $80MT. We have recently revised our iron ore price sensitivities to a range of $75/MT - $85/MT (62% Fe). The seaborne coking coal market faces comparable pressures with the 4th quarter prices rolling over at about $119/MT, relatively unchanged from the prior two quarters.
Moody's notes that Cliffs has announced a roughly $6 billion after tax impairment charge that they anticipate taking in the third quarter on the seaborne iron ore and coal assets based upon the adverse market conditions for these commodities. While the impairment charge is non-cash, it virtually eliminates the company's equity position.
Although the company's US iron ore operations are contract based, with the seaborne price being one component of the pricing equation, we anticipate earnings to weaken in this segment. Cliffs' Asia Pacific operations and Eastern Canadian operations are more exposed to price movements in the seaborne market. We expect widening losses in the Canadian iron ore segment and contraction in the Asia Pacific segment, likely to a loss position over the next several quarters. We also anticipate continued losses in the US coal segment. Factoring these elements together with the expected lower price sensitivities, we believe that leverage will increase to over 4.5x by the end of 2014/first quarter of 2015.
The change in the speculative grade liquidity rating to SGL-3 reflects our expectation for decreasing cash flow generation and the potential impact of the impairment on the company's ability to comply with ithe debt/capital covenant in its $1.25 billion revolver. We expect the company to be able to resolve this issue.
The Ba2 rating on the senior unsecured instruments under Moody's loss given default methodology reflects the fact that virtually all debt is currently pari passu in the capital structure. We note that the most recent amendment to Cliffs' revolving credit facility requires that this facility be secured by June 30, 2015. The change in the mix of secured and unsecured debt in the capital structure change is likely to have a negative impact on the senior unsecured ratings.
The review for further downgrade reflects the likelihood of deterioration of performance greater than currently anticipated. The review also reflects the uncertainty surrounding the timing of any potential sale of the Asia Pacific or US coal assets, the likely proceeds that might be received and the application of proceeds from any asset sales. The review will focus on expected performance at various price points and the likely asset base and earnings potential relative to debt levels should the company sell its Asia Pacific operations and/or its US coal operations.
Headquartered in Cleveland, Ohio, Cliffs is the largest iron ore producer in North America and is also involved in the metallurgical coal business through its two coking coal mining complexes and to a lesser extent in thermal coal. In addition, the company participates in the international iron ore markets through its subsidiaries in Australia and Canada. For the twelve months ended June 30, 2014, the company had revenues of $5.1 billion.
The principal methodology used in this rating was Global Mining Industry published in August 2014. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.
qquebec
Super Moderator
qquebec
Super Moderator
CEDOLONE
Forumer storico
iguanito
Forumer storico
Sei diventato prudente!!!Io passo
montecarlo
Nuovo forumer
meglio la 2018 isin us18683kaf84 prezzo 80 e cedole che si adeguano ai downgrades (ora 5,2%)
sethcohen
Nuovo forumer
Qualcuno ha notizie sull'eventuale rimborso di rottapharm 2019 6,125% oggi quota ancora sopra il prezzo dell'eventuale call ma non vorrei rischiare di perdermi un punto e mezzo in un mese....
Il rendimento ad oggi sfiora il 5% lordo....
Ho appena scritto all'i.r., vediamo....
Il rendimento ad oggi sfiora il 5% lordo....
Ho appena scritto all'i.r., vediamo....
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