The Rating Outlook is Stable.
KEY RATING DRIVERS
Kinross' ratings reflect its sizable reserves, average cost position, average geopolitical risk position, and the potential for substantial development spending over the medium term, together with Kinross' commitment to maintain a conservative 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.
Kinross operates in the U.S.,
Fitch estimates scheduled maturities of debt as of
Liquidity should remain adequate to support Kinross' capital spends which are guided to be
Fitch expects Kinross to be free cash flow (FCF) neutral in 2014 based on
Fitch also expects Kinross to remain in compliance with its covenants.
Sensitivity to Gold Prices
In 2013, with average gold price realizations of
The final feasibility study on the mill expansion at Tasiast has been completed. The study shows a 17.2% after-tax internal rate of return (IRR) with an initial capital expenditure of
The Stable Outlook reflects Fitch's expectation that total debt/operating EBITDA will not exceed 3x when borrowing is at its peak and will generally be less than 2x. Fitch believes that spending for Tasiast will be disciplined. Should internal cash generation fall behind expectations, Fitch expects expenditures to be cut or to be supported by asset sales rather than substantial new debt issuance.
Negative: Future developments that may, individually or collectively, lead to negative rating action include:
--Gold prices and internally generated cash flow deteriorate without an equal management response in the form of reduced spending, asset sales or the raising of equity;
--Expansion project at Tasiast largely debt funded;
--Expectations that total debt/operating EBITDA will be greater than 3.0x on a sustained basis.
Positive: Not anticipated given potential capital spending plans, but future developments that may lead to a positive rating action include:
--Modest net borrowing and FCF positive on average.
--IDR at 'BBB-';
--Revolving Credit Facility at 'BBB-';
--Senior Unsecured Term Loan due 2017 at 'BBB-';
Additional information is available at 'www.fitchratings.com'.
--'Corporate Rating Methodology' (
Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage
Source: Fitch Ratings
Most Popular Stories
- Neighbor Warns Chris Brown to Stay Off His Property
- Venezuelan Officials Banned From Traveling in U.S.
- As Jobs Market Strengthens, Many Don't Feel It
- WWE Showing Off Its Muscles
- Islamic State Fights for Control of Syrian Oil Wealth
- Hispanic Arts Leaders Unite Across the Border
- House Votes to Sue Obama
- Adrienne Bailon Disses Ex-Lover Rob Kardashian
- Exxon Profit Rises, Production Drops
- Target Taps Pepsi Exec as New CEO