S&P: U.S. Metals, Mining Feel the Pressure to Add Leverage

Source: Mineweb.com  (10/30/07)

As of July, S&P maintains ratings on 53 U.S. metals and mining companies, up from 48 in 2002. While nearly 80% of these companies have stable or positive outlooks, S&P's Primary Credit Analyst Marie Shmaruk noted that their ratings are lower than they were in 2002.


Research published by Standard & Poor's Monday determined that the use of leverage by U.S. mining and metal companies has risen over the past several years, but has been driven by specific business needs rather than a shift to more aggressive financial policies.

S&P Primary Credit Analyst Marie Shmaruk suggests that most mining and mining companies have used debt judiciously, increasing borrowing primarily "to enhance reserves and to improve market penetration, geographic diversity, and product offerings."

...Shmaruk said, "we believe that if business conditions remain strong, business expansion, productivity improvements, and industry rationalization will encourage participants to increase overall debt levels."

As of July, S&P maintains ratings on 53 U.S. metals and mining companies, up from 48 in 2002. While nearly 80% of these companies have stable or positive outlooks, Shmaruk noted that their ratings are lower than they were in 2002.

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