The Rating Outlook is Stable.
Key Rating Drivers:
Goldcorp's credit rating reflects its sizable long-lived reserves in areas of relatively low geopolitical risk, favorable cost position and strong project pipeline, as well as plans for substantial development spending over the medium term. Goldcorp is committed to maintaining a conservative investment-grade capital structure given its exposure to gold prices. In weak gold markets, the company has the ability to defer development and exploration and focus on cash preservation.
Liquidity should remain adequate to support Goldcorp's large capital spends in 2014. With capex in 2014 expected to be between
The company has closed on the sale of its interest in Marigold for proceeds of
The company's main projects under construction are
Fitch expects spending to moderate in 2015 with the completion of
Goldcorp's earnings are sensitive to gold prices; a
Financial leverage is elevated with total debt of
The Stable Outlook reflects Fitch's expectation that Total debt/EBITDA will not exceed 3.5x when borrowing is at its peak and will generally be below 2x. Should internal cash generation fall behind expectations, Fitch expects expenditures to be cut or to be supported by new equity issuance or asset sales.
Negative: Future developments that may, individually or collectively, lead to negative rating action include:
--Deterioration in gold prices and internally generated cash flow without an equal management response in the form of reduced spending, dividends, assets sales or the raising of equity.
--Total Debt/EBITDA not to exceed 3.5x at the peak and 2.0x on average longer term.
Positive: Future developments that may, individually or collectively, lead to positive rating action include:
--Sustained positive FCF generation.
Fitch affirms Goldcorp's ratings as follows:
--IDR at 'BBB';
Additional information is available at 'www.fitchratings.com'.
--'Corporate Rating Methodology' dated
Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage
Source: Fitch Ratings
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