Moody’s cuts Consolidated Minerals, notes to Caa1

Moody's Investors Service said it downgraded the corporate family rating and the probability of default rating of Consolidated Minerals Ltd. (Consmin) to Caa1 from B3 and to Caa1-PD from B3-PD, respectively.

Concurrently, the agency downgraded the ratings on the senior secured notes due in 2020 to Caa1 from B3.

The outlook is negative.

"Our downgrade reflects the knock on impact on Consmin of a significantly reduced FOB manganese price of $2.42/dmtu in Q3-2015 from $3.83/dmtu in Q3-2014 and that its EBIT generation no longer covers its interest expense," Douglas Rowlings, Moody's analyst and local market analyst for Consolidated Minerals, said in a news release.

"The negative outlook on the ratings factors our view that the manganese price could weaken further in 2016 and is unlikely to recover significantly from current levels. Furthermore the outlook consider that unless there are initiatives to materially improve Consmin's liquidity profile, it could face challenges in meeting its interest payments in late 2016 as liquidity is gradually eroded."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.