PERTH, AUSTRALIA, Oct. 23, 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 'CCC+' to SD
(Selective Default). The Company provides the attached Press Release from S&P.
Mirabela Nickel Ltd. Downgraded To 'SD' After Missed Interest Payment; Issue
Rating Lowered To 'D'
MELBOURNE (Standard & Poor's) Oct. 23, 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 'SD' from 'CCC+'. We
also lowered the issue credit rating on the US$395 million 8.75% notes to 'D'
from 'CCC+'. At the same time, the ratings were removed from CreditWatch with
negative implications, where they were placed on Oct. 2, 2013.
The rating actions stem from Mirabela's announcement that it did not make the
interest payment of about US$17.3 million on its 8.75% senior notes, which was
scheduled to be paid on Oct. 15, 2013. This nonpayment would only constitute a
default under the terms of the notes if it is not remedied within the 30-day
grace period that will end by November 15.
"At this stage, we are uncertain about Mirabela's willingness to make the
payment within the grace period, although we believe that it currently has
sufficient cash to meet that obligation," said Standard & Poor's credit
analyst Thomas Jacquot. "The company had about US$80 million of cash at the
end of August 2013."
On September 27, Mirabela announced that one of its two offtakers, Votorantim
Metais Niquel S.A. (Votorantim) had served notice to the company of its
intention to terminate its offtake agreement at the end of November. The
agreement was scheduled to expire at the end of 2014. As Mirabela has a US$50
million loan from Banco Bradesco S.A. (Bradesco) that is secured on the
Votorantim receivables, termination of the offtake agreement could lead to a
default under the Bradesco loan which, if not remedied, could lead to a cross
default under the US$395 million notes.
Subsequently on October 18, Mirabela announced that the termination notice
served by Votorantim was invalid and that Votorantim would honor its
obligations as originally envisaged, although Mirabela expects Votorantim to
purchase only a small proportion of the mine's output. This announcement would
indicate that the likelihood of an immediate default under the Bradesco loan
and potential subsequent cross default under the notes had reduced. However,
the company subsequently announced, on October 22, that it has not paid the
interest due on the notes.
Mr. Jacquot added: "We consider a missed interest payment as a default when
the nonpayment has occurred and is continuing for at least five business days
from the scheduled payment date. This is even though a payment default has not
occurred according to the legal provisions of Mirabela's notes, which
incorporate a 30-day grace period."
The company has indicated its intention to provide a further update to the
markets by the end of October. Should the interest payment remain unpaid by
Nov. 15, 2013, we would expect to lower the corporate credit rating on
Mirabela to 'D'. Any potential upward movement on the rating above 'SD' is
uncertain at this stage, both in terms of likelihood and magnitude.
RELATED CRITERIA AND RESEARCH
-- Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings,
Oct. 1, 2012
-- General Criteria: Timeliness of Payments: Grace Periods,
Guarantees, And Use Of 'D' And 'SD' Ratings, Dec. 23, 2010
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
-- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
Media Contact: Richard Noonan; firstname.lastname@example.org; 613 9631
Credit analysts: Thomas Jacquot, email@example.com May
Standard & Poor's Ratings Services, part of McGraw-Hill Financial (NYSE:MHFI),
is the world's leading provider of independent credit risk research and
benchmarks. We publish more than a million credit ratings on debt issued by
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Standard & Poor's (Australia) Pty. Ltd. holds Australian financial services
licence number 337565 under the Corporations Act 2001. Standard & Poor's
credit ratings and related research are not intended for and must not be
distributed to any person in Australia other than a wholesale client (as
defined in Chapter 7 of the Corporations Act).
SOURCE Mirabela Nickel Ltd.
CONTACT DETAILS Mirabela Nickel Limited +61 8 9324 1177 firstname.lastname@example.org
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