Moody's cuts Barrick Gold view to negative

Moody's Investors Service said it revised to negative from stable the outlooks for Barrick Gold Corp., Barrick Gold Finance Co. and Barrick Gold, Inc. Barrick Gold Finance's notes and Barrick Gold, Inc.'s shelf are guaranteed by Barrick Gold Corp.

At the same time, Moody's affirmed the Baa1 senior unsecured debt ratings of all three companies.

The outlook for Placer Dome, Inc. was also changed to negative from stable.

The outlook revision follows Barrick's announcement that it is making an unsolicited bid to acquire up to 100% of the shares of NovaGold Resources, Inc. for cash, which Moody's estimated will total approximately $1.6 billion, including the exercise of warrants and a smaller acquisition.

Barrick said it will fund the purchase significantly with debt.

The lowering of the outlook reflects the increase in debt, as well as the significant capex and resultant negative free cash flow that Moody's anticipates over the next few years as Barrick moves forward with the development of three significant projects, Pascua Lama on the Chile/Argentine border, Pueblo Viejo in the Dominican Republic and Donlin Creek in Alaska.

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