Rating agency Moody's has placed Barrick Gold Corp. under review for a possible downgrade now that the company has launched a $7.3-billion takeover bid for Equinox Minerals Ltd.

At the moment, Barrick's debt is rated Baa1 by Moody's, but the agency is worried about how much could be borrowed to fund the friendly takeover. Assuming the total purchase price is funded with debt, Barrick's debt to earnings before interest, taxes, depreciation and amortization would jump to 2.3 times, up from 1.1 times at the end of 2010.

That Barrick is under review for possibly tacking on too much debt is a bit comical considering that analysts and executives in the mining industry blasted Equinox for slapping on $3.2-billion to fund its own takeover of Lundin just a few months ago.

Moody's said it needs to assess the production profile of Equinox's assets and how they would contribute to paying back new debt before it makes any ratings decisions.