PERTH, Australia, Nov. 18, 2013 /CNW/ - Mirabela Nickel Limited (Mirabela or the Company) (ASX: MBN) wishes to advise that Standard and Poor's Ratings Services
(S&P) lowered the Company's corporate credit rating from 'SD' to 'D'. The
Company provides the attached Press Release from S&P.
Mirabela Nickel Ltd. Downgraded To 'D' After Standstill Agreements
MELBOURNE (Standard & Poor's) Nov. 15, 2013—Standard & Poor's Ratings
Services said today that it has lowered its corporate credit rating on
Australian nickel mining company Mirabela Nickel Ltd. to 'D' from 'SD'.
The issue rating on the company's US$395 million 8.75% notes remains at
'D', and the recovery rating of '4' remains unchanged.
"Today's lowering to 'D' follows Mirabela's announcement that it had
entered into standstill agreements with its key creditors that have
financing facilities with the company for about US$454 million,"
Standard & Poor's credit analyst Thomas Jacquot said. "During the
60-day standstill period, Mirabela will not make any payment of
interest or principal under its existing debt other than as specified."
This downgrade follows our previous lowering of the rating on Mirabela
to 'SD' on Oct. 23, 2013, after the company had failed to pay its
scheduled interest in that month under its US$395 million notes.
Following the missed interest payment, the company had a 30-day grace
period that ended yesterday under its notes indenture, to remedy the
Mirabela's main creditors - comprising representatives of the
noteholders, Banco Bradesco S.A., and Caterpillar Financial Services
Corp. - have agreed not to enforce any rights they currently have for a
period of up to 60 days. During the standstill period, Mirabela intends
to restructure its debt, combined with a recapitalization.
"In our view, it is highly likely that the debt restructuring would be
in the form of a distressed exchange because we believe the company
would likely run out of cash by early 2014," said Mr. Jacquot. "During
the third quarter of 2013, the company's cash balance reduced by about
US$30 million. If the company were to use its cash at a similar rate in
the fourth quarter, and given the amounts outstanding under the notes
together with a principal payment in January 2014, its cash reserves
would likely be depleted by early 2014."
RELATED CRITERIA AND RESEARCH
General Criteria: Timeliness of Payments: Grace Periods, Guarantees, And
Use Of 'D' And 'SD' Ratings, Oct. 24, 2013
2008 Corporate Criteria: Analytical Methodology, April 15, 2008
Richard Noonan; email@example.com; 613 9631 2152
Thomas Jacquot, firstname.lastname@example.org
May Zhong, email@example.com
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SOURCE: Mirabela Nickel Ltd.
For further information:
Mirabela Nickel Limited
Telephone: +61 8 9324 1177