S&P cuts Samarco credit rating after Brazil mine disaster
BRASILIA Nov 23 (Reuters) - Standard & Poor's cut Brazilian miner Samarco Mineracao SA's debt rating further into speculative territory on Monday as the deadly dam disaster compromises the finances of the joint venture owned by BHP Billiton and Vale SA.
S&P cut Samarco's global scale corporate credit to 'BB-' from 'BB+', both non-investment grade ratings, and kept its credit watch negative, which means it could downgrade the iron-ore miner even further.
"These actions reflect Samarco's difficulties to recover its operations, potential fines, and weak cash flows that are undermining the company's financials and boosting liabilities," S&P said in a statement.
The rating agency had threatened to cut Samarco's rating after the Nov. 5 accident in which a mudflow from a burst tailings dam killed at least a dozen people, left hundreds homeless and polluted nearby rivers across several states.
Samarco halted its iron-ore operations after the accident and Brazilian authorities have announced an initial fine of 250 million reais ($67.01 million). Government officials have said the total bill for the company will be significant larger. ($1 = 3.7308 Brazilian reais) (Reporting by Alonso Soto; Editing by Sandra Maler)
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