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S&P: Barminco view to negative
Standard & Poor’s said it revised the outlook on Barminco Holdings Pty Ltd. to negative from stable and affirmed the B- corporate credit rating on the company.
The agency also said it affirmed the B+ rating and 1 recovery rating on the company’s senior secured revolving credit facility and B- rating and 4 recovery rating on its senior unsecured notes.
The outlook revision reflects an expectation that soft market conditions and subdued demand are likely to place increased pressure Barminco’s earnings, while its highly leveraged capital structure renders it vulnerable to any further unfavorable business developments, S&P said.
It also reflects concerns that a breach of financial covenants within the senior secured revolving credit facility is currently at risk and may require the company to renegotiate terms, the agency said.
Nonetheless, S&P said it understands that the facility is currently unutilized.
The ongoing weakness in commodity prices and subsequent cost reduction measures by the mining sector have reduced the scope of works and subdued demand in mining services, which has hampered Barminco’s ability to secure new contracts, the agency said.
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