Moody’s reviews Freeport-McMoRan

Moody's Investors Service said it placed the Baa3 senior unsecured ratings of Freeport-McMoRan Inc. and Freeport-McMoRan Oil and Gas LLC under review for downgrade.

At the same time, the agency placed the Baa2 senior unsecured ratings of Freeport Minerals Corp. under review for downgrade.

Moody’s said the initiation of the review reflects the recent further step down in prices for Freeport-McMoRan’s key commodities, particularly oil, which has been trading below $40bbl, and expectations that the current price environment for copper and oil, will result in insufficient free cash flow in 2016 to de-lever the balance sheet as previously expected, despite the company's ongoing efforts to reduce costs and capital expenditures, and idle higher cost production in an effort to respond to the new market dynamics.

At this time no meaningful catalyst is seen that will improve the overall market dynamics given weak global growth rates and slowing demand in China, the agency said.

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