Moody’s rates South32 Baa1

Moody’s Investors Service said it assigned a Baa1 issuer rating and a short-term issuer rating of P-2 to South32 Ltd.

Moody’s also said it assigned a P-2 rating to the commercial-paper program entered into by South32 Ltd. and South32 Treasury (USA) Ltd., a wholly owned subsidiary.

The outlook is stable.

South32 is the newly-formed entity that has been demerged from the BHP Billiton group, the agency said.

The ratings reflect South32’s position as a substantial diversified mining company, benefitting from solid product, operational and geographic diversity, Moody’s said.

The ratings also consider South32’s low cost operations, relatively low capital expenditure requirements and an expectation that the company will maintain a conservative financial profile with low financial leverage over the next 12- to 24-months, the agency said.

The ratings are constrained by the company’s exposure to volatile commodity prices and demand with several of its commodities expected to continue to face pricing pressures over the next two months, Moody’s said.

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