S&P Global upgrades Anglo American's long-term debt to 'BB+'

S&P Global upgraded mining company Anglo American's long-term debt to ‘BB+’ from ‘BB’ and raised its South Africa national scale rating to 'zaA/zaA-1 from 'zaBBB+/zaA-2' with a stable outlook for both.

The rating actions come after the recent rally in the prices of bulk commodities, including iron ore and coking coal, which led to better-than-expected cash flow for Anglo American in 2016.

According to the agency, the free operating cash flows (FOCF), together with the divestments of the niobium and phosphates division and its 9.7% interest in Exxaro would translate into net debt of about $9bn, which is below the company's target of $10bn, and would provide a good starting point for further deleveraging through 2018.

The stable outlook reflects the analysts' view that the miner's successful execution of its deleveraging plans would translate into a financial buffer under the current rating.

Anglo American shares closed 3.3% higher at 1,224.05p.