Fortescue Metals has played down a downgrade by ratings agency Moody's, saying it will have no impact on its debt structure.
Moody's cut its rating on Fortescue by a notch late on Monday, citing worsening financial metrics amid a prolonged downturn in the sector.
The agency cut Fortescue's senior secured rating - already below investment grade, from "Ba1" to "Ba2" and placed it on negative outlook.
"Our focus on successfully reducing operating and capital costs continues to offset the impact of lower iron ore prices," chief financial officer Stephen Pearce responded in a statement.
Fortescue reported a four per cent drop in half year profit to $US319 million ($A441.95 million) in February, but also cut its cost guidance further on the back of an ongoing savings program.
Earlier this month, Fortescue announced it is in talks with Brazilian iron ore giant Vale to strike a deal that could give the larger rival a stake in the Australian miner, and help the two companies boost their combined market share in China.
Moody's said it expects Fortescue's credit metrics to remain weak over the next 12 to 18 months, with the downturn being deeper and prospects for a recovery extended.
"The downgrade reflects Moody's expectation of weaker performance over the next two years resulting from the significant drop in iron ore prices," the ratings agency said.
However, it noted the miner's work over the last 24 months to sharply drive down costs, and said it expects Fortescue's operations to remain comfortably above breakeven levels under its base-case assumptions of the iron ore price.
Fortescue shares were initially unaffected by the downgrade, rising in early trade before closing four cents lower at $2.54.
On Monday, around 20 million shares in Fortescue changed hands in a block trade, with media reports indicating Russian investor Viktor Rashnikov may have offloaded a part of his holding in the company.
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