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On the same day that Barrick Gold Corp. announced its $7.3-billion takeover bid for Equinox Minerals Ltd., Moody's Investor's Service put Barrick's debt rating under review. It was a chilling move, considering that the mining industry was already up in arms about how much debt Equinox was going to tack on to buy Lundin Mining.

Turns out the review resulted in no changes. Moody's released the results of its efforts Tuesday and is keeping Barrick's rating at Baa1.

"The confirmation of Barrick's Baa1 rating reflects Moody's expectation that the company's debt protection metrics and leverage, while tightened as a result of the Equinox acquisition, will remain within acceptable ranges," Moody's said.

After the acquisition, Barrick's debt to earnings before interest, taxes, depreciation and amortization will sit at two times, up from 1.1 times at year end 2010. Although that means debt will be nearly doubled, "the company's substantial liquidity position and the currently strong gold price environment, which we expect to persist at least over the next 12 months, should allow the company to better cover these investments from internal cash flow, thus minimizing the level of external financing required."

That Moody's rating is unchanged may not seem worthy of mention, but it was only fair to get it on record that Barrick is in good financial standing considering the review's announcement was originally reported.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 4:00pm EDT.

SymbolName% changeLast
ABX-T
Barrick Gold Corp
+4.22%21.99
LUN-T
Lundin Mining Corp
+2.06%13.4

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