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BHP faces ratings downgrade amid prolonged commodities slump
Investors question whether the mining company should continue to target increases to dividend payouts
Add BT as a preferred sourcePublished Mon, Nov 23, 2015 · 09:50 PM
Melbourne
WHETHER BHP Billiton Ltd scraps its progressive dividend policy or not, it risks a credit ratings downgrade as the collapse in oil and iron ore shows no sign of abating.
The price to protect BHP bonds from non-payment reached a four-year high of 132.5 basis points on Nov 13 as the yield premium offered over swap rates surged for its debt. While the company is graded at the highest A level by the three major ratings companies, Bloomberg's default-risk model indicates its creditworthiness is more in line with the highest BBB score, three levels lower.
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