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Moody's: Rio Tinto outlook developing
Moody's Investors Service said it revised the outlook for the Rio Tinto Group rated companies to developing from positive.
At the same time, Moody's said it affirmed the A3 senior unsecured rating and Prime-2 short-term rating of rated entities within the Rio Tinto group.
The change in outlook reflects Moody's view that Rio Tinto's 2009 performance will be adversely impacted by the negative market conditions in and outlook for key metal markets such as copper and aluminum over this time frame, production and grade challenges at certain copper operations, and the likelihood that iron ore prices in the next contract renegotiation period will be challenged given the slowdown in global steel production.
Although Moody's said it expects earnings to remain at relatively decent levels given Rio Tinto's broad operating footprint, the lower cash generation, in combination with continued high debt levels, is pressuring the company's ratings.
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