CREDIT RATINGS – AUSTRALIA

Fortescue shrugs off ratings hit

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Original article by Paul Garvey
The Australian – Page: 20 : 16-Mar-16

Shares in Fortescue Metals Group closed just 1.55 per cent lower on 15 March 2016, following a decision by Moody’s to downgrade the iron ore producer’s credit rating. In contrast, BHP Billiton and Rio Tinto shares both fell by 3.4 per cent. Meanwhile, Morgan Stanley has reduced its share price target for Fortescue from $A2.10 to $A1.90 and downgraded its recommendation on the stock to "underweight".

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, MOODY’S INVESTORS SERVICE INCORPORATED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

‘Limited headroom’ for M&A at BHP

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Original article by Amanda Saunders
The Australian Financial Review – Page: 15 : 2-Mar-16

BHP Billiton CEO Andrew Mackenzie recently indicated that abolishing the progressive dividend policy will increase the group’s capacity to pursue mergers and acquisitions. However, Standard & Poor’s analyst May Zhong says that without a rebound in commodity prices BHP will not have much scope for M&A deals. The ratings agency has removed BHP from negative credit watch following the changes to its dividend policy. BHP’s credit rating was downgraded from "A+" to "A" earlier in 2016.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, SAMARCO MINERACAO SA

Tweak to BHP dividend won’t cut it, says S&P

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Original article by Peter Ker
The Australian Financial Review – Page: 13 : 4-Feb-16

Standard and Poor’s recently downgraded BHP Billiton’s credit rating to "A", and analyst May Zhong says a minor reduction in its dividend will not be sufficient to avert a further downgrade. Zhong has declined to specify how large the dividend reduction would need to be, but notes that other factors also contributed to the downgrade. BHP is under pressure to abandon its progressive dividend policy when its 2015-16 interim results are released on 23 February 2016.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, MOODY’S INVESTORS SERVICE INCORPORATED, RIO TINTO LIMITED – ASX RIO

Rich BHP dividends face chop

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 8 : 3-Feb-16

Shares in BHP Billiton closed 2.2 per cent lower at $A14.92 on 2 February 2016, after Standard & Poor’s reduced its credit rating from "A+" to "A". The ratings agency warned of the potential for a further downgrade if BHP retains its progressive dividend policy amid a downturn in commodity prices. Aberdeen Asset Management’s John Manning expects BHP to adopt a dividend payout ratio, while some observers forecast that its 2015-16 interim dividend will be reduced by 50 per cent to $US0.31 per share.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, ABERDEEN ASSET MANAGEMENT LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, BLACKROCK INCORPORATED, RIO TINTO LIMITED – ASX RIO

BHP’s ratings under pressure as S&P cuts commodity prices

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Original article by Matt Chambers
The Australian – Page: 19 : 25-Jan-16

A move by Standard & Poor’s to reduce its price assumptions for key commodities could jeopardise BHP Billiton’s credit rating. The ratings agency has scaled back its iron ore price forecast for 2016 and 2017 by 20 per cent, to $US40 per tonne, while price forecasts for other metals have also been downgraded. Meanwhile, Richard Knights of Liberum Capital has warned that BHP may need to undertake a rights issue to protect its credit rating.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, LIBERUM CAPITAL LIMITED, MERRILL LYNCH AND COMPANY INCORPORATED

Moody’s may cut Woodside, Origin ratings

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Original article by Brian Robins
The Australian Financial Review – Page: 15 : 25-Jan-16

Ratings agency Moody’s Investors Service has scaled back its Brent crude oil price assumptions by $US10 per barrel in both 2016 and 2017, to $US33 and $US38 respectively. The firm notes that there is a risk of a further downturn in the crude oil price. Meanwhile, Moody’s has indicated that it expects to complete a review of the credit ratings of Origin Energy and Woodside Petroleum by the end of March, which could potentially result in downgrades.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, ORIGIN ENERGY LIMITED – ASX ORG, WOODSIDE PETROLEUM LIMITED – ASX WPL, SCHLUMBERGER LIMITED

Turnbull rejects ‘slash and burn’ approach to spending

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Original article by David Uren
The Australian – Page: 2 : 26-Nov-15

The Australian Government does not intend to include deep cuts in spending in its December 2015 Budget update. Prime Minister Malcolm Turnbull said on 25 November that spending cuts must not compromise economic growth. Westpac chief economist Bill Evans does not believe that Australia’s "AAA" credit rating is under threat.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Worst yet to come for BHP, says S&P

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Original article by Peter Ker, Perry Williams
The Australian Financial Review – Page: 29 : 25-Nov-15

Standard & Poor’s has left BHP Billiton’s credit rating of "A+" with a negative outlook unchanged. Analyst May Zhong says the tailings dam disaster at the Samarco iron ore joint venture will not have any near-term effect on BHP’s credit rating. However, Zhong adds that factors such as BHP’s progressive dividend policy and the downturn in commodity prices are likely to adversely affect the group’s financial risk profile in 2016.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, SAMARCO MINERACAO SA, VALE SA, MOODY’S INVESTORS SERVICE INCORPORATED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

BHP tipped to cut dividend to keep rating

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Original article by James Thomson, Peter Ker
The Australian Financial Review – Page: 11 : 24-Nov-15

BHP Billiton’s share price has fallen by 18.3 per cent in the last month, with the stock closing at $A20.07 on 23 November 2015. BHP’s progressive dividend policy has come under scrutiny following the downturn in iron ore and coal prices. Glyn Lawcock of UBS believes that unless prices rebound, the resources giant will have to reduce its dividend to ensure that its credit rating is not downgraded. UBS recently scaled back its 12-month share price target from $A28 to $A24.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ABERDEEN ASSET MANAGEMENT LIMITED, STANDARD AND POOR’S CORPORATION

Qantas back from ‘junk’ credit rating

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Original article by Jamie Freed
The Australian Financial Review – Page: 15 & 20 : 18-Nov-15

Standard & Poor’s has upgraded the credit rating of Qantas to "BBB-" with a "stable" outlook. Qantas had lost its investment-grade credit rating in December 2013 due to its financial problems. Meanwhile, CEO Allan Joyce is upbeat about the outlook for the airline, forecasting that average annual growth in the domestic market will rise to three per cent in the fiscal years from 2016 to 2020. Qantas shares rose by $A0.21 to $A3.76 on 17 November 2015.

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, STANDARD AND POOR’S CORPORATION, MOODY’S INVESTORS SERVICE INCORPORATED, UBS HOLDINGS PTY LTD, MERRILL LYNCH (AUSTRALIA) PTY LTD, AIR NEW ZEALAND LIMITED – ASX AIZ, DEUTSCHE LUFTHANSA AG, SOUTHWEST AIRLINES COMPANY, ALASKA AIRLINES, RYANAIR HOLDINGS PLC, WESTJET AIRLINES, ETIHAD AIRWAYS