S&P downgrades Boart Longyear debt

Agency tips difficult conditions as major miners reduce exploration budgets.

Standard and Poor's has downgraded drilling provider Boart Longyear Ltd's corporate debt ratings on expectations that operating conditions will remain difficult in the next 12 months due to major mining companies' reduced exploration drilling budgets.

In a statement to the Australian Securities Exchange, Boart said its corporate family rating and senior unsecured note rating had been downgraded from BB- to B with a stable outlook.

The stable outlook reflects S&P's view that liquidity should stay adequate as the company amended the covenants that govern its revolving credit facility and cost-cutting measures should eventually lead to improved credit measures (see Roger Montgomery's Inside the mining services disaster).