AngloGold rating cut to junk with stable outlook at S&P
AngloGold Ashanti, the world's third-biggest producer of the metal, had its rating reduced on wednesday one step to junk by Standard & Poor's after a record three-month decline in the price of bullion in the second quarter.
The company's long-term issuer credit assessment was cut to BB+, Standard & Poor's highest non-investment grade, with a stable outlook, the ratings company said.
The reduction follows Moody's Investors Service's decision on July 12 to reduce AngloGold's rating by one step to its lowest investment grade.
"The recent severe drop in the gold price exposes South African gold miner AngloGold Ashanti," S&P said in the statement. "We have revised downward our assessment of AngloGold's financial risk profile."
AngloGold on July 15 said it plans to write down its assets and stockpiles by as much as $2.6-billion, spurred by gold's 23% plunge this year.
The company, which seeks to sell dollar bonds this year, is also facing demands by South African unions for wages to be more than doubled for entry-level workers. – Bloomberg