Glencore's Credit Rating Under Strain If Copper Remains Down
- Company will be rated junk if copper stays below $2.10/lb: RBC
- Glasenberg to provide update on debt-reduction plans next week
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When Glencore Plc meets with shareholders next week, one big question on the minds of investors will be how long the company’s credit rating can withstand an ongoing slide in commodity prices.
Copper is 18 percent below the price used by Standard & Poor’s to assess its BBB rating for Glencore, one of the largest commodity traders. While S&P says below-estimate prices don’t mean a downgrade is imminent, the gap highlights how quickly metals prices have fallen and the headache it brings for producers with lots of debt.