Rio a significant credit improver

Last week it was Rio Tinto's turn to be noted as one of the more significant credit improvers by the monitors at Markit Group. On Friday, Rio's CDS spreads contracted by 52 basis points to 748 bps, bringing the decline for the week to 66 bps and the decline to 260 bps over the last four weeks.

Markit attributed the contraction to the mining company saying it was considering a fresh equity issue to raise funds and its announcement of $1.6 billion of asset sales. Rio's target is to reduce debt by $10 billion but this looks ambitious in the current market. The latest sales will go some way to quelling doubts, though it will need several more disposals if it is to meet its target.