International credit rating agency S&P Global Ratings (Standard & Poor's Ratings Services) has announced that it has raised its credit rating on Australian iron ore miner Fortescue Metals Group to 'BB+' from 'BB'. The outlook on the long-term rating is stable.
S&P stated that the upgrade of Fortescue’s credit rating follows the company's announcement of a further debt reduction of US$1 billion in December this year, which has strengthened the company's resilience to periods of iron ore price weakness and operating stress. Once completed, this will bring total debt reduction to date for the financial year 2016-17 ending June 30, 2017, to around US$1.7 billion, generating an interest saving of US$64 million. Meanwhile, the stable outlook reflects S&P’s expectation that Fortescue will operate within its financial policy and that its growth strategy will remain unchanged.