Moody’s Investor Service has lowered its credit rating on senior unsecured bonds, in all of Rio Tonto’s group entities, to Baa1 from A3. The outlook is negative.
The view from Moody’s is that there has been a fundamental downward shift in the mining sector with the downturn being deeper and prospects for a recovery extended, resulting in increased credit risk and weaker metrics for Rio Tinto as well as the global mining sector. Supply imbalances in the mining sector, particularly in iron ore, the major earnings and cash flow driver for Rio Tinto, will maintain pressure on prices for several years.