Bulletin: Fortescue Metals Group's Share Buyback Remains Within Rating Expectations; Headroom To Reduce As Capital Spending Peaks

SYDNEY (S&P Global Ratings) Oct. 11, 2018--S&P Global Ratings today said that Fortescue Metals Group Ltd.'s (BB+/Stable/--) A$500 million on-market share buyback would be within our rating expectations because of the company's solid balance sheet. The buyback program will commence later this month and continue over the next 12 months. However, we expect the rating buffer for the Australia-based mining company to reduce as development spending peaks for the Eliwana project over the next two to three years. After a period of deleveraging over the past few years, Fortescue holds a solid balance sheet and a greater portion of discretionary cash flow ahead of its next major development comprising the Eliwana mine and rail project in Western Australia. As a

...SYDNEY (S&P Global Ratings) Oct. 11, 2018--S&P Global Ratings today said that Fortescue Metals Group Ltd.'s (##+/Stable/--) A$500 million on-market share buyback would be within our rating expectations because of the company's solid balance sheet. The buyback program will commence later this month and continue over the next 12 months. However, we expect the rating buffer for the Australia-based mining company to reduce as development spending peaks for the Eliwana project over the next two to three years. After a period of deleveraging over the past few years, Fortescue holds a solid balance sheet and a greater portion of discretionary cash flow ahead of its next major development comprising the Eliwana mine and rail project in Western Australia. As a result, the company has built up a sizable rating buffer at the '##+' rating level. Its funds from operations (FFO) to debt was 56% and debt to EBITDA 1.4x for the year ended June 30, 2018. However, the rating headroom will reduce as development...

Bulletin