BHP had its credit rating cut from A1 to A3 by Moody’s Investor Services with a negative outlook. Despite changing its ‘”progressive dividend” policy at the recent half-yearly results and slashing its dividend, Moody’s expects the credit metrics from the company to stay “substantially weaker” in coming years.
The move to cut the rating is in contrast to Standard & Poor’s decision to affirm its ‘A’ rating on BHP. An ‘A’ rating from S&P on long term debt is equivalent to an A2 rating from Moody’s. An ‘A3’ rating by Moody’s is the equivalent of an ‘A-’ rating from S&P.
Moody’s therefore seems to be much more bearish on the outlook for BHP than does S&P.