Moody's lowers Sibanye-Stillwater

Moody's Investors Service said it downgraded Sibanye Gold Ltd.'s (Sibanye-Stillwater) corporate family rating to Ba3 from Ba2 and probability of default rating to Ba3-PD from Ba2-PD.

The ratings on the senior unsecured notes due in 2022 and 2025 issued by Stillwater Mining Co. and guaranteed by Sibanye-Stillwater also were downgraded to Ba3 from Ba2.

The outlook is negative.

The ratings reflect increasing downside risks for Sibanye-Stillwater's credit profile as a result of challenging operating conditions in South Africa and increasing refinancing risks for the company as its 6 billion in South African rand revolving credit facility matures in November 2019, Moody's said.

While recognizing the company's demonstrated ability to successfully navigate challenging operating conditions, the unresolved strike at Sibanye-Stillwater's gold mines has been going on for significantly longer than anticipated, the agency said.

The platinum group metals operations in South Africa have so far been largely unaffected by strikes and therefore remain profitable, Moody's noted.

The failure to contain and resolve the ongoing strike action, or strikes spreading to the South Africa platinum mines would deteriorate credit quality further, the agency added.

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