Glencore's Credit Rating Cut to Just Above Junk

LONDON—Commodities titan Glencore PLC suffered a fresh blow Thursday when Standard & Poor's Ratings Services downgraded its investment-grade credit rating to just one notch above junk status over fears the commodity price rout will continue.

The credit-ratings firm downgraded the Switzerland-based miner and trader by one notch to BBB- from BBB. The downgrade reflects renewed uncertainty about the company's operating performance this year and next. It follows S&P's decision to lower its price assumptions for some of Glencore's key products, including copper, zinc and nickel.

"We believe that commodity prices will remain very unsettled while the impact of China's slowdown plays out," said S&P in a statement. "This environment results in reduced visibility of future profits for Glencore and its peers."

S&P also this week lowered the credit rating for Anglo-Australian mining titan BHP Billiton Ltd., the world's largest miner by market value, and the world's largest iron ore producer Brazilian miner Vale SA last week.

Glencore, the world's largest thermal coal exporter by volume, moved to safeguard its credit rating last year with a plan to reduce its net debt by more than $10 billion, to between $18 billion to $19 billion, by the end of this year.

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(END) Dow Jones Newswires

February 04, 2016 10:05 ET (15:05 GMT)

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