Moody’s ups Fortescue Metals, debt

Moody's Investors Service said it upgraded Fortescue Metals Group Ltd.'s corporate family rating to Ba1 from Ba2.

At the same time, the agency upgraded the senior unsecured and senior secured ratings of FMG Resources (August 2006) Pty. Ltd. to Ba2 and Baa3 from B1 and Ba1, respectively.

The outlook is stable.

Moody’s said the upgrade reflects several factors, including: (a) The substantial debt reduction the company has undertaken over the last several years and most recently in December 2016; (b) the continued and sustained cost improvements, which have created an earnings buffer to lower iron ore prices; (c) limited near-term capital expenditures, which supports free cash flow generation; and (d) the reduced refinancing risk and reduction in secured debt.

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