S&P: KGHM view to negative

Standard & Poor's said it revised the outlook on KGHM International Ltd. to negative from stable.

The agency also said it affirmed its BB- long-term corporate credit rating.

The outlook revision was based on the expected weakening in the company's credit metrics in the next 12 months, said George Economou, an S&P analyst.

The company is expected to incur debt to fund its larger share of Sierra Gorda capital expenditures, which was previously not included in the agency's forecasts, Economou said.

The ratings reflect the company's weak business risk profile and aggressive financial risk profile, the agency said.

Key credit risks include the company's exposure to volatile copper prices, its fourth-quarter cost profile, relatively short reserve life of most of its mines and large growth capital expenditures, S&P said.

These risks are partially mitigated by KGHM's modest debt leverage and satisfactory operating diversity in attractive and lower-risk mining jurisdictions, the agency said.

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