Fitch lifts Fortescue’s credit rating, outlook

The ratings agency has welcomed Fortescue’s efforts to further reduce costs and secured debt.

Ratings agency Fitch has joined Moody’s in upgrading the credit rating of Fortescue Metals Group, hailing the iron ore miner’s “strong cost reduction progress” and moves to further reduce secured debt.

Fitch lifted the rating on Fortescue’s long-term senior unsecured debt to BB+ , from BB, and its outlook from negative to stable, in the wake of its full-year profit result last week.

It follows Moody’s move last week to similarly upgrade the miner’s short-term debt rating.

Fitch is forecasting direct cash costs at the upper end of Fortescue guidance for fiscal 2017, despite flagging that further cost improvements may be challenging.

“This is because we recognise that factors beyond Fortescue’s control, such as crude oil prices and the Australian dollar exchange rate, which have a significant effect on its cost structure,” Fitch said.