BHP and Rio Tinto suffer credit rating downgrade

Credit ratings agency Fitch has downgraded the credit rating outlook for BHP Billiton and Rio Tinto in the wake of sliding iron ore prices.

Analysts say the move is unlikely to affect BHP Billiton and Rio Tinto's ability to borrow as Fitch reaffirmed their respective A+ and A- ratings. However, both companies were placed on negative watch.

"The rating actions follow an industry review, which included an analysis of forecast operational and financial profiles for each company over the next three to four years and incorporated Fitch's new price assumptions on major commodities," Fitch said in a statement.

Morningstar resources analyst Mathew Hodge told local media that the downgrades were a reflection of the commodities cycle.

"It won't really affect their ability to raise money or the price," Hodge said. "They're still very strong credit names." Endi