Fortescue has made another step in the direction of corporate respectability. Moody’s has raised the credit rating of the iron ore producer to Ba2/stable and, while this rating is below “investment grade”, Fortescue needs two more upgrades to reach this target.
Moody’s Senior Credit Officer Matthew Moore said Fortescue’s debt strategy had led to the ratings upgrade. “The upgrade to Fortescue’s ratings reflects the considerable progress that the company made in reducing its debt levels in fiscal 2016 and Moody’s expectation that it will continue to reduce debt further in fiscal 2017.”
Fortescue CFO Stephen Pearce said, “You’ve seen our credit improve quite significantly over the last twelve months and you would expect that ratings would follow.” S&P Global Ratings currently rate Fortescue senior long term debt as BB after a downgrade was issued in April 2015 from BB+.