Moody’s says any Cliffs Natural split could be junk rated

Jan 28 2014, 15:43 ET

• Some of the air goes out of today's balloon for Cliffs Natural Resources (CLF +1.7%) as Moody’s corporate credit analysts say they don’t expect any split of the company and that the U.S. operations alone are "unlikely to be of investment grade quality."
• Casablanca Capital, which owns ~5.2% of CLF shares, is pressuring the miner to split its international operations from its U.S. iron ore and coal mining operations, but it thought the more stable U.S. operations would enjoy an investment-grade credit rating, which could help raise the dividend and create an MLP.
• Moody's believes CLF would be better off continuing "to exhibit a conservative approach to its capital structure and remain focused on cost reduction and managing to a neutral cash flow position while making necessary capital investments.”