Moody's downgrades platinum/palladium miner Stillwater ratings
On the heels of the recently announced resignation of its COO, Stillwater Mining has sustained another blow as Moody’s downgraded the credit rating for the nation’s sole PGM miner.Author: Dorothy Kosich
Posted: Wednesday , 05 Dec 2007
RENO, NV -
Moody's Investor Service Tuesday lowered Stillwater Mining Company's ratings from B1 to B2.
Moody's also lowered Stillwater's senior secured rating from B1 to B2 and senior unsecured rating from B3 to Caa1, citing Stillwater's "weak operating and financial performance over the last three quarters."
Moody's Vice President and Senior Credit Officer, Terry Marshall, and Senior Vice President Steven Oman said the rating also reflects "our view that the company will continue to underachieve in the near term, given its high employee attrition rate, reduced skill level of the labor force, slow progression towards more physically-demanding selective mining methods, and high capex requirements."
"We believe that the company's production, earnings, and cash flow will continue to be challenged that the company's liquidity will continue to deteriorate as it funds its significant capex program," they added. "Finally, the rating considers that the company has a relatively modest cushion under its debt to EBITDA financial covenant and may require covenant relief that its earnings deteriorate from current levels."
Moody's announcement came a few days after Stillwater COO and Executive Vice President Steve Lang announced he would leave Stillwater to work for a yet unidentified mining company. Stillwater is the only U.S. producer of platinum and palladium.