S&P assigns BBB- to Northern Star, notes

S&P said it rated Northern Star Resources Ltd. and its planned $500 million to $600 million of 10-year senior unsecured notes BBB-. The outlook is stable.

“Australia-based Northern Star Resources Ltd.'s status as a top-10 global gold producer with operations in low-risk countries and the company's strong operating cash flow and low leverage support its credit profile. Northern Star's marginally higher position on the cost curve relative to peers, relatively high asset concentration, limited product breadth, and sizable capital expenditure (capex) temper these strengths,” the agency said in a press release.

The rating on the maiden notes issue reflects the rating on the issuer and their status as a senior unsecured obligation, S&P said. The company’s major operating subsidiaries will guarantee the notes.

Northern Star plans to use the proceeds for general corporate purposes and will ensure the company has a sound liquidity position to fund its capex pipeline, including the Kalgoorlie Consolidated Gold Mines expansion project.

The stable outlook reflects a forecast the company maintain its production levels and cost position and keep its debt-to-EBITDA ratio below 1x over the next 12-24 months, the agency said.

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