Moody’s lowers Fortescue, FMG

Moody's Investors Service said it downgraded Fortescue Metals Group Ltd.'s corporate family rating to Ba2 from Ba1.

At the same time, the agency downgraded FMG Resources (August 2006) Pty Ltd.'s senior unsecured rating to Ba3 from Ba2 and senior secured rating to Ba1 from Baa3.

The outlook is negative.

"The downgrade of Fortescue's corporate family rating reflects the very weak iron ore fundamentals and our expectation that iron ore prices will remain around the current weak levels through 2016," Moody's vice president and senior analyst Matthew Moore said in a news release.

"Such price levels will lead to a substantial weakening of Fortescue's earnings and key credit metrics compared to our previous expectation."

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