Iron ore price risks BHP, Rio ratings: agency

By Staff Reporter

Ratings agency Standard & Poor’s has warned BHP Billiton and Rio Tinto their credit ratings will be difficult to maintain if they push for capital management in the event that the iron ore price remains weakened.

However, if the price dips below $US90, that buffer will be squashed. “As such, they will have less flexibility at the current ratings to undertake debt-funded growth or capital-management initiatives,’’ S&P said, according to The Australian.

Both BHP and Rio, now under new post-global financial crisis chief executives, have made strong overtures to investors about capital management despite the falling iron ore price.

Read more here: Business Spectator


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