Fitch: Recapitalization and LBO Risk Low for Global Mining Industry.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of & LONDON -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. does not expect leveraged-buyout (LBO LBO See: Leveraged buyout LBO See leveraged buyout (LBO). ) transactions or leveraged recapitalizations in the global mining industry, discussed in a report published today. Resource companies have been, for the most part, spared from private equity activity bidding wars out of fears that future returns will be exposed to volatile commodity prices. Consolidation in the metals and mining industry has been fueled by very strong cash flows over the past three years and near-term prospects for quick debt repayment. Benefits generally include diversification by operation or commodity, integration of operations or consolidation of operations, as well as the ability to leverage exploration, engineering and metallurgical expertise. Adequate liquidity and a flexible capital structure are crucial to maintaining a healthy asset base for mining and metals companies, given earnings and cash flow exposure to volatility in commodity prices, the long time horizons of development and capital projects, and relatively high operating risk Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. . The full report 'Mining and Metals: Event Risk' can be found on the Fitch Ratings web site at http://www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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