How Successful Have Newmont Mining’s Debt Reduction Efforts Been This Year?

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NEM
Newmont Mining

Newmont Mining announced the repayment of a term loan due in 2019 earlier in the month, which reduced its outstanding debt by around $275 million. [1] The company also bought back $498 million worth of notes outstanding and repaid the balance on a revolving credit facility earlier in the year. [2] Aided by an improvement in gold prices and the company’s cost reduction initiatives, these actions have translated into a 31% improvement in the company’s Net Debt to EBITDA ratio this year, as illustrated below.

NEM Debt to EBITDA 1

As a result of Newmont Mining’s debt reduction initiatives, the company has maintained its investment grade credit rating. [3] A strengthening of Newmont’s balance sheet will also give the company the financial flexibility to operate in an environment of weaker gold prices than prevailing at present, standing it in good stead for such a scenario.

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Have more questions about Newmont Mining? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Newmont Mining

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Notes:
  1. Newmont Pays Remaining Balance on Term Loan Maturing in 2019, Newmont Mining News Release []
  2. Newmont Mining’s Q2 2016 10-Q, SEC []
  3. Moody’s confirms Newmont’s Baa2 Sr. Unsec. Rating; Outlook Stable, Moody’s Investors Services []