PERTH, Australia, Nov. 18, 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 'SD' to 'D'.
The Company provides the attached Press Release from S&P.
Mirabela Nickel Ltd. Downgraded To 'D' After Standstill Agreements
MELBOURNE (Standard & Poor's) Nov. 15, 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 'D' from 'SD'. The
issue rating on the company's US$395 million 8.75% notes remains at 'D', and
the recovery rating of '4' remains unchanged.
"Today's lowering to 'D' follows Mirabela's announcement that it had entered
into standstill agreements with its key creditors that have financing
facilities with the company for about US$454 million," Standard & Poor's
credit analyst Thomas Jacquot said. "During the 60-day standstill period,
Mirabela will not make any payment of interest or principal under its existing
debt other than as specified."
This downgrade follows our previous lowering of the rating on Mirabela to 'SD'
on Oct. 23, 2013, after the company had failed to pay its scheduled interest
in that month under its US$395 million notes. Following the missed interest
payment, the company had a 30-day grace period that ended yesterday under its
notes indenture, to remedy the nonpayment.
Mirabela's main creditors - comprising representatives of the noteholders,
Banco Bradesco S.A., and Caterpillar Financial Services Corp. - have agreed
not to enforce any rights they currently have for a period of up to 60 days.
During the standstill period, Mirabela intends to restructure its debt,
combined with a recapitalization.
"In our view, it is highly likely that the debt restructuring would be in the
form of a distressed exchange because we believe the company would likely run
out of cash by early 2014," said Mr. Jacquot. "During the third quarter of
2013, the company's cash balance reduced by about US$30 million. If the
company were to use its cash at a similar rate in the fourth quarter, and
given the amounts outstanding under the notes together with a principal
payment in January 2014, its cash reserves would likely be depleted by early
RELATED CRITERIA AND RESEARCH
-- General Criteria: Timeliness of Payments: Grace Periods,
Guarantees, And Use Of 'D' And 'SD' Ratings, Oct. 24, 2013
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
Media Contact: Richard Noonan; email@example.com; 613 9631
Credit analysts: Thomas Jacquot, firstname.lastname@example.org May
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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 Telephone: +61 8 9324 1177
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CO: Mirabela Nickel Ltd.
-0- Nov/18/2013 05:35 GMT
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