Article Image

IPFS News Link • Economy - Economics USA

Time Is Running Out For Freeport After Downgrade To Junk And Striking Warning...

• http://www.zerohedge.com, by Tyler Durden

Three weeks ago we wondered when Moody's would finally get the Freeport McMoRan joke when, with its stock crashing to unseen lows, it would finally cut investment-grade rated FCX (Baa3) to its rightful place deep in junk territory:

As we noted then "the US copper and gold producer has seen its 5-yr CDS spread trading at implied junk levels for the last six months. Troubles have intensified over the past month and credit spreads now imply a 79% chance of default within the next five years."

We got the answer last night, when Moody's finally slashed its rating on the copper miner by four notches, from Baa3 to B1 saying "the downgrade reflects an increase in leverage stemming from a severe drop in copper prices last year." 


Free Talk Live