...Flexible Dividend Policy: Fitch sees Rio Tinto's (RT) move to a flexible dividend policy as supportive of its `A-' rating. RT's dividend will fall from USD2.15 a share in 2015 to a minimum of USD1.10 a share in 2016 and the company intends to pay out between 40% and 60% of its underlying earnings to shareholders in future years . Despite this and other cash preservation measures announced during the annual results , the Outlook remains Negative, reflecting the high leverage for an `A-` rating and the ongoing weakness in commodities markets. Leverage to Peak in 2016: We expect FFO adjusted gross leverage to peak in 2016 at around 3.5x (2015 3.0x) due to a projected 22% year-on-year (yoy) decline in EBITDA. After 2016, we expect the capital preservation measures implemented by management to strengthen the balance sheet and help the company reach sustainable leverage within the `A-` rating of 2x by 2018, using Fitch commodity price assumptions. The company currently has limited headroom under...
