UPDATE 1-S&P cuts Fortescue Metals to BB on weak iron ore price
(Add S&P comments)
By Cecile Lefort
SYDNEY, April 22 (Reuters) - Standard & Poor's lowered its credit rating for Australian miner Fortescue Metals Group to BB from BB-plus and placed its outlook on negative, citing a deterioration in the firm's finances due to falling iron ore prices.
"The negative outlook reflects the challenging market conditions facing iron ore players," said Standard & Poor's credit analyst May Zhong.
"It also reflects the risks that Fortescue's credit metrics could fall below our current expectation if there is any misstep in reducing its cash production cost or there is any unfavorable foreign exchange movement.
Last week, Moody's also cut the miner's ratings one notch lower to Ba2.
S&P had already warned it might soon downgrade several miners apart from Fortescue, including Vale SA, Rio Tinto, BHP Billiton Ltd, Anglo American PLC, CAP SA, Exxaro Resources and Eurasian Resources Group (ERG).
Shares in Fortescue have halved in value over the past seven months in line with plummeting prices for the steelmaking raw material and a glut in output.
Fortescue, the world's fourth-largest iron ore producer but saddled with $9 billion in debt, has been under scrutiny since it pulled a $2.5 billion refinancing last month due to the high yield being sought. (Reporting by Cecile Lefort; Editing by SImon Cameron-Moore)
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