S&P may lower Anglo American

Standard & Poor's said it placed on CreditWatch with negative implications the A-/A-2 long- and short-term corporate credit ratings on Anglo American plc.

"The CreditWatch placement reflects our need to evaluate further the likely effect of a sharp downturn in global economic conditions and the commodity cycle on Anglo American's credit quality. We also need to assess the scale and timing of likely corrective actions by management," S&P analyst Alex Herbert said in a statement.

Anglo American's cash flows fluctuate significantly with changes in market prices. The group is somewhat concentrated on base metals and platinum group metals, where spot prices have fallen very significantly, the agency said.

Some mitigation comes from Anglo American's iron ore and coal operations which, as contract bulk commodities, have less short-term volatility and currently enjoy high prices, S&P noted.

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