S&P puts Barrick Gold on watch

Standard & Poor's said it placed its A- long-term corporate credit rating on Barrick Gold Corp. on CreditWatch with negative implications after the company announced an unsolicited $1.53 billion takeover of NovaGold Resources Inc. (unrated).

The A-2 CP rating on Barrick is affirmed, the agency said, adding that the CreditWatch stems from the increased risk in Barrick's conservative financial profile, which is currently supported by large cash balances that contribute to low net debt leverage.

S&P added that the company has stated that it would fund the acquisition of NovaGold with cash and debt, which will weaken its funds flow to debt metrics.

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