| Analyst Sees Cliffs Natural Resources Redlining Debt Pacts | |
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Cliffs Natural Resources Inc. (NYSE: CLF) will violate its debt covenants in the third quarter and get forced into a restructuring, an analyst said Monday.
Shares of the Cleveland-based mining company changed hands recently down nearly 5 percent at $5.96.
Axiom's Gordon L. Johnson III downgraded Cliffs to Sell, from Hold citing risks to the company's liquidity in the face of what he called a pending collapse in iron ore prices.
Cliffs recently agreed to sell a raft of non-core assets including Bloom Lake iron ore mine near Labrador, and its Logan County coal operations in West Virginia, while its Chief Executive Lourenco Goncalves has acquired a sizable personal acquisitions in the company's shares.
But Johnson noted that the privately held Indian conglomerate Essar Group recently got financing to boost iron ore production even as demand sinks.
"Iron ore prices are bout to take the next big leg down," with demand from China slowing at record rates, Johnson said.
At the same time, significant devaluations of key foreign currencies puts Cliffs at a competitive disadvantage.
"As this dynamic becomes increasingly clear, we fear Cliff's shares could come under significant pressure," Johnson said.
Johnson expects the company will violate a key interest coverage ratio in its debt covenants by the third quarter of 2015.
"There's not much more they can do to raise capital other than eliminate the dividend," Johnson said.
Latest Ratings for CLF
Date | Firm | Action | From | To |
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Mar 2015 | Axiom | Downgrades | Neutral | Sell | Feb 2015 | Deutsche Bank | Maintains | | Hold | Jan 2015 | JP Morgan | Maintains | | Neutral |
View More Analyst Ratings for CLF
View the Latest Analyst Ratings
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CLIFFS Natural Resources
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PRODUCTEUR |
CODE : CLF |
ISIN : US18683K1016 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
CLIFFS Natural Res est une société de production minière de fer basée aux Etats-Unis D'Amerique. CLIFFS Natural Res est productrice de fer, de charbon au Bresil, au Canada et en Australie, et détient divers projets d'exploration au Canada. Ses principaux projets en production sont WABUSH MINE, EMPIRE AND TILDEN MINES, HIBBING TACONITE, NORTHSHORE MINE, UNITED TACONITE, OAK GROVE MINE, GREEN RIDGE MINE et PINNACLE MINE au Canada, AUSTRALIAN IRON ORE et SONOMA en Australie et AMAPA au Bresil et ses principaux projets en exploration sont MT JACKSON J1 en Australie et DIAGNOS, WAWA, FREEWEST, MC FAULD'S LAKE, MACFADYEN, WAWA CLAIMS et BIG DADDY au Canada. CLIFFS Natural Res est cotée aux Etats-Unis D'Amerique, en Allemagne et en France. Sa capitalisation boursière aujourd'hui est 5,3 milliards US$ (5,0 milliards €). La valeur de son action a atteint son plus haut niveau récent le 16 mai 2008 à 99,17 US$, et son plus bas niveau récent le 15 janvier 2016 à 1,20 US$. CLIFFS Natural Res possède 297 400 968 actions en circulation. |