S&P affirms Sibanye Gold

S&P said it affirmed its B+ long-term issuer credit rating and its zaA long-term South Africa national scale rating on Sibanye Gold Ltd.

The outlook on the long-term issuer credit rating remains positive.

S&P said it also affirmed its B+ issue rating on Sibanye's $500 million five-year senior unsecured notes and $550 million eight-year senior unsecured notes. The recovery rating is 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a payment default.

“The affirmation reflects our view that Sibanye is continuing to bed down its recent South African and U.S. platinum group metals (PGM) acquisitions, with operations at both divisions on track to meet the company's revised production guidance in 2018, and cost savings at the South African PGM operations to be realized ahead of schedule,” S&P said in a news release.

“However, operational issues related to safety incidents at its South African gold operations, and external factors such as a stronger-than-anticipated South African rand (ZAR) and depressed precious metal prices are expected to result in negative to break-even FOCF in both 2018 and 2019.”

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