Friday, 20 March 2009


Gold Fields, the world's fourth-largest gold producer, on Thursday said Standard and Poor's Ratings Services (S&P) has assigned the company a 'BBB-/ A-3' long-term and short-term global corporate credit rating and 'zaA/zaA-1' long-term and short-term South Africa national scale corporate credit rating. The outlook is stable.

The gold producer said while it intended to reduce debt over the next 18 months, the official credit rating gives it the flexibility to efficiently structure long-term debt as well as new debt, should the need arise.

S&P said the long-term ratings reflect Gold Fields' satisfactory business risk and intermediate financial risk profiles while the short-term ratings reflect Gold Fields' adequate liquidity.

The ratings agency said the satisfactory business risk profile reflects Gold Fields' market position as the world's fourth-largest gold producer, an industry-leading long reserve life of over 20 years, and healthy profitability underpinned by persistently strong gold prices.

S&P said the stable outlook reflected the expectation that Gold Fields would continue to report healthy cash flow generation, supported by ongoing strong gold prices and a weak exchange rate.

"Capital expenditures, in our view, should moderate, but are likely to remain quite significant, as the company invests in developing its assets to increase production," said S&P credit analyst Alex Herbert.

S&P pointed out that on the basis of the base-case price assumption for gold of US$750 per oz in 2009 and 2010, it anticipates that cash flows could be mostly consumed by such spending.

"We do not currently envisage upward rating potential in the near term.

This reflects inherently volatile gold prices and exchange rates, capital intensity, and cost pressures, as well as operating and country risks and quite limited diversification, which may improve over time," Herbert said.

Nevertheless, the ratings agency noted continued moderate leverage so the ratings currently have some scope to accommodate additional debt, if necessary, during periods of high gold prices.

But it warned that negative rating pressure could develop if the company is unexpectedly not successful in strengthening its liquidity profile, notably if near-term debt maturities due in May 2009 are not adequately refinanced.

Other adverse factors would be lower-than-expected gold prices, leading to weaker credit metrics for the ratings.

"The credit rating is an independent endorsement of Gold Fields as an investment grade company with a stable outlook," said Gold Fields chief financial officer Paul Schmidt.

"The rating further confirms aspects such as Gold Fields' sound corporate governance and risk management while aligning it with global best practice and its peers.

"Although the intention is to reduce debt over the next 18 months, an official credit rating will allow flexibility to efficiently structure long-term debt as well as new debt, should the need arise," Schmidt said.

At 3.27pm shares in Gold Fields were 5.31% or R5.95 firmer at R117.95 on the JSE.

Thursday, 19 March 2009

Q-Cells (QCEG.DE)

07:58GMT 19March2009 - Q-Cells seen higher; confirms 2008 figures

Shares in Q-Cells (QCEG.DE), the world's largest maker of solar cells, are indicated 5.4 percent higher after the company confirms its preliminary figures for 2008.

"The long-term downtrend of the Q-Cells shares is not yet broken, but the bullish sentiment in the market today could lead to a positive development in this session," Close Brothers Seydler writes in a note.