Fitch Affirms Goldcorp Inc. at 'BBB'; Outlook Stable

Fitch Ratings has affirmed the Issuer Default Rating (IDR) at 'BBB' for Goldcorp Inc. (TSE:G, NYSE: GG), the $862.5 million senior unsecured convertible notes at 'BBB' and the $2 billion senior unsecured revolving credit facility at 'BBB'.

The Rating Outlook is Stable.

Goldcorp's credit ratings reflect its sizable long lived reserves in areas of relatively low geopolitical risk, favorable cost position and strong project pipeline as well as plans for substantial development spending over the medium term. Goldcorp is committed to maintaining a conservative investment grade capital structure given its exposure to gold prices. In weak gold markets, the company has the ability to defer development and exploration and focus on cash preservation.

Liquidity at March 31, 2012 was strong, with cash on hand of $1.4 billion and full availability under the company's $2 billion revolver due November 2016. Goldcorp should remain well within its current financial covenants of a maximum ratio of total debt to tangible net worth of less than or equal to 1.00:1.

Liquidity should remain adequate to support Goldcorp's large capital spends. With capital expenditures in 2012 expected to be $2.6 billion, Goldcorp could be free cash flow negative up to $1.3 billion in 2012 assuming average 2012 gold prices at $1,416/oz. and the timing of spending. Going forward, operations are expected to return to positive free cash flow in 2014 assuming gold prices of $1,200/oz from 2013.

Current operations are expected to provide 72% of operating cash flow for the period 2012 through 2016 reducing reliance on development properties.

Goldcorp's earnings are sensitive to gold prices; a $100/oz. decline in gold prices from the company's assumption of $1,600/oz. could result in a $186 million decline in free cash flow before dividends. Costs are sensitive to the Canadian dollar; a 10% appreciation of the Canadian dollar relative to the US dollar from the company's assumption of CAD1.00=USD1.00 could result in a $118 million decrease in free cash flow before dividends.

Financial leverage is quite modest with total debt of $862.5 million at 0.28x LTM March 31, 2012 operating EBITDA of $3.1 billion. The convertible senior unsecured notes mature on Aug. 1, 2014.

The Stable Outlook reflects Fitch's expectation that Total debt/EBITDA will not exceed 3.5 times (x) when borrowing is at its peak and will generally be below 1.5x. Should internal cash generation fall behind expectations, Fitch expects expenditures to be cut or to be supported by new equity issuance or asset sales.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria & Related Research:

--'Corporate Rating Methodology' dated Aug. 12, 2011.

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229

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Contacts:

Fitch Ratings
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Monica M. Bonar, [phone]
Senior Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
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Secondary Analyst:
Sean T. Sexton, CFA, [phone]
Managing Director
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Committee Chairperson:
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Senior Director
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