S&P's Cuts BHP Billiton's Credit Ratings

(RTTNews) - BHP Billiton (BHP.AX, BLT.L, BBL, BHP) noted the announcement, 1 February 2016, by Standard & Poor's that it has lowered the credit ratings of BHP Billiton Limited and BHP Billiton Plc from A+ to A.

The rating on BHP Billiton's senior secured notes has been lowered from A+ to A and subordinated notes from A- to BBB+.

Standard & Poor's noted that it recently lowered its price assumptions for iron ore, oil, and copper, reflecting very challenging market conditions and increased demand uncertainty over the coming years. It now forecasts that global diversified miner BHP Billiton could see its ratio of funds from operations to debt fall to 30%-40% over 2016 and 2017, well below threshold for an 'A+' rating.

Metal prices have come under pressure because of fears of lower demand from China, and excess supply remains an issue.

BHP Billiton has also been placed on 'CreditWatch with negative implications' and Standard & Poor's has advised it aims to resolve the CreditWatch after the release of BHP Billiton's Results for the half year ended 31 December 2015.

S&'s noted that The CreditWatch placement reflects the possibility that it might lower the ratings by a further one notch after the group's earnings release in late February, largely depending on the announced dividend policy and capital expenditure guidance.