Hecla Mining Co. #B# Rating Placed On CreditWatch Positive On Announced Acquisition Of Mines From Klondex

Stocks and Financial Services Press Releases Tuesday March 20, 2018 10:03
NEW YORK--20 Mar--S&P Global Ratings

NEW YORK (S&P Global Ratings) March 19, 2018--S&P Global Ratings today placed its ratings on Coeur d'Alene, Idaho-based silver and gold producer Hecla Mining Co., including the 'B' corporate credit rating, on CreditWatch with positive implications.

Our 'B' issue-level rating on the company's $500 million senior unsecured notes due in 2021 has also been placed on CreditWatch with positive implications. The recovery rating on the debt is '3', indicating our expectation of meaningful (50%-70%; rounded estimate: 65%) recovery prospects in the event of a payment default.

The CreditWatch placement follows Hecla's announcement that it will acquire all outstanding shares of Klondex Mines Ltd. for $462 million, using a combination of cash and shares of Hecla common stock and a newly formed company consisting of the Klondex Canadian assets (Klondex Canada). Klondex is a high-grade Nevada underground producer with its Fire Creek, Midas, and Hollister mines. Hecla plans to fund the cash portion of the consideration entirely from cash on the balance sheet. As of Dec. 31, 2017, the company reported $186 million cash and equivalents and $97 million availability under its $100 million revolving credit facility.

The CreditWatch placement with positive implications indicates we could affirm or raise the ratings after we review the transaction. We expect to resolve the CreditWatch within 90 days, after we assess the impact of this transaction on Hecla Mining's credit quality. This will include reassessing Hecla's competitive position, as well as expectations for credit measures.

We could raise our corporate credit rating on Hecla if we expect adjusted leverage to be sustained below 4x. This would be consistent with the contemplated increased production volumes and EBITDA margins above 25%.

We could affirm the corporate credit rating if we expect debt to EBITDA to approach 5x. This could occur if we expect lower-than-anticipated production volumes or a gold price decline. We could also affirm the ratings, if the new mines do not meaningfully improve the company's competitive position.

Latest Press Release


NEXT BLOCK ASIA + Fabulous Bangkok After-Party Bangkok, Thailand will host the 2-day NEXT BLOCK ASIA "Beyond Crypto" by Krypton Events and CoinAdvice on 25-26 June 2019 at the W Hotel. The conference will bring together experts from CRYPTO and BEYOND,...

Photo Release: EXIM Thailand Visits Deputy Governor of State Bank of Vietnam To Discuss Thai Investment Prospects in Vietnam

Mrs. Warangkana Wongkhaluang (second left), Senior Executive Vice President of Export-Import Bank of Thailand (EXIM Thailand), recently paid a visit to Mr. Doan Thai Son (center), Deputy Governor of State Bank of Vietnam in Hanoi to discuss monetary...

Photo Release: EXIM Thailand Visits Thai Ambassador to Hanoi Discussing Ways to Promote Thai-Vietnamese Trade and Investment

Mrs. Warangkana Wongkhaluang (second left), Senior Executive Vice President of Export-Import Bank of Thailand (EXIM Thailand), recently paid a courtesy visit to His Excellency Mr. Tanee Sangrat (center), Ambassador of Thailand to Vietnam and Miss...

TMB re-affirms its leadership position in the Thai banking industry by launching the first ever Multi Currency Account in Thailand allowing exporters to manage six major currencies in one account

TMB continues to develop digital solutions that truly meet customer's need, creating positive changes to customer's life, along with its Make THE Difference philosophy, to re-affirm its market leadership position. TMB today becomes the first bank in...

Fitch Rates EXIM#s USD300 Million Senior Notes Final #BBB+#

Fitch Ratings has assigned Export-Import Bank of Thailand's (EXIM, BBB+/Stable) USD300 million five-year senior unsecured notes a final rating of 'BBB+'. The notes were issued under the bank's USD1.5 billion medium-term note (MTN) programme. The...

Related Topics