Johannesburg, South Africa — 17 July 2013 – AngloGold Ashanti Limited “’ the world’s third-biggest producer of the precious metal “’ has had its rating reduced one step to “junk” by Standard & Poor’s after a record three-month decline in the price of bullion in the second quarter.
The company’s long-term issuer credit assessment was cut to BB+, S&P’s highest non-investment grade, with a stable outlook, the ratings company said in an e-mailed statement quoted by Bloomberg News. The reduction follows Moody’s Investors Service Limited’s decision on July 12 to reduce AngloGold’s rating by one step to its lowest investment grade.
“The recent severe drop in the gold price exposes South African gold miner AngloGold Ashanti,” S&P said in the statement. “We have revised downward our assessment of AngloGold’s financial risk profile.”
On July 15 AngloGold said it planned to write down its assets and stockpiles by as much as US$2.6 billion, spurred by gold’s 23% plunge this year. The company, which seeks to sell dollar bonds this year, is also facing demands by South African unions for wages to be more than doubled for entry-level workers.
Source: Bloomberg News. For more information, click here.