Moody's rates Fortescue notes B1

Moody's Investors Service said it assigned a provisional B1 rating to $800 million 144A guaranteed senior unsecured notes to be issued by FMG Resources (August 2006) Pty Ltd., the financing vehicle for Fortescue Metals Group. All other ratings of the group remain unchanged.

The outlook is stable.

The notes rank equally with all other senior unsecured debt of the issuer. The issuance is guaranteed by Fortescue and its restricted subsidiaries.

The proceeds will be used to fund the company's expansion program.

Fortescue's B1 corporate family rating recognizes the strengthening in the company's financial profile due to the continued progress in its production ramp-up and the expectation for strong cash flow generation under its current annualized run rate, Moody's said.

The rating also considers the solid fundamentals of the iron ore industry, which should continue to support high iron ore prices relative to historical levels, the agency said.

The rating is constrained by the relatively short operating history, Moody's said, and the uncertainty associated with Fortescue's plans to substantially expand its production capacity over the next few years.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.