S&P: Brascan on watch

Standard & Poor's said it placed its A- long-term corporate credit and senior unsecured debt ratings on Brascan Corp. on CreditWatch with negative implications following an announcement that Noranda Inc. and China Minmetals Corp. have entered into negotiations to sell 100% of the common shares outstanding of Noranda (which is 40%-owned by Brascan).

In addition, the BBB global scale preferred stock and junior subordinated debt ratings were also placed on CreditWatch negative. At the same time, S&P affirmed its A-2 global CP and A-1(Low) Canadian national scale CP ratings on the company.

"The sale of Noranda would materially augment Brascan's near-term cash position," said S&P credit analyst Kenton Freitag. "Brascan's longer term use of the Noranda proceeds, however, is uncertain, and it is not clear whether Brascan will deploy the proceeds in a manner that will preserve current levels of financial flexibility and diversity."

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