Stephen Joynt,
President & CEO,
Fitch Ratings
 
London, England — MININGREVIEW.COM — 05 June 2009 – Fitch Ratings – a global rating agency committed to providing the world’s credit markets with independent and prospective credit opinions, research, and data – says more downgrades of credit ratings are expected in the mining sector.

Making this prediction, Fitch director of corporates Peter Archbold said this was because the outlook for some firms was challenging as they sought to recover from the global downturn. “The rating outlook is that we do think further downgrades are likely,” he told the Mining Investment Congress here.

Fitch takes into account cyclical ups and downs in mining, but it expects a company to exit any downturn and return to a mid-cycle stance within 18 to 24 months.

“As we are getting new information, we are continuing to assess the companies’ exit point 18 to 24 months from the trough of the recession. Based on that assessment, we think further downgrades are likely,” he reiterated.

Reuters reports that although bank lending has been scarce, many firms have been successful recently in raising money in the bond markets. However, this current situation in issuing bonds may not last.

“We think that companies should raise funds as they’re available, because we have concerns about the availability of debt capital market funding later this year,” Archbold explained.