Commodity prices have recently dropped to the lowest levels for several years, reflecting lackluster market conditions and the uncertainty over China's economic slowdown. Global mining company Anglo American announced during its capital markets day its decision to put its dividend payment on hold, as well as further cost reductions and its plan to embark on a major portfolio restructuring to mitigate the prevailing market conditions. In our view, if current prices persist, the company would be likely to see an increase in the net debt position in 2016. In light of the above uncertainties and the pressure on credit metrics, we are placing the global 'BBB-/A-3' rating and 'zaAA/zaA-1' national scale ratings on Anglo American on CreditWatch with negative implications.
