S&P rates Mineral Resources notes B+

S&P said it assigned a preliminary B+ long-term issuer credit rating to Mineral Resources Ltd., along with a B+ preliminary issue rating to the group's proposed $750 million senior unsecured notes with a recovery rating of 4.

The rating reflects the execution risks associated with the company's growth strategy, as well as its concentrated asset base and end-market exposure, S&P said.

The agency said it does not believe the company's external mining services earnings are of sufficient scale or quality to materially diversify these risks.

S&P said it expects Mineral Resources to generate materially negative free cash flow over the next few years, due to high near-term capital expenditure.

The stable outlook reflects a view that the company will appropriately manage its sizable execution risks with sufficient financial buffer to absorb near-term volatility in lithium prices, the agency said.

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