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ELEANOR HALL: The world's biggest miner, BHP Billiton, has been rocked by a credit ratings downgrade by the global ratings agency Standard & Poor's.

BHP is now under pressure to bolster its balance sheet and that means shareholder dividends are almost certainly up for review.

Joining us now with more is business editor Peter Ryan.

So Peter this downgrade comes as the company deals with the continuing environmental disaster at its Samarco mine in Brazil. How concerned are BHP's bosses about this?

PETER RYAN: Well Eleanor as you say BHP is already in enough damage control given the clean-up and compensation bill with Samarco, plus potential penalties which could end running into billions of dollars.

The ratings agencies of course are watching that, but this morning’s downgrade for BHP from A plus to A from Standard & Poors is all about the commodities rout and what that's doing to BHP's revenue.

For example resources prices under pressure, lower demand from China, the glut of crude oil weakening oil prices. Now even more critically, S&P has BHP on credit watch negative and is looking for guidance on BHP's capital expenditure, and importantly the dividend policy - and that will be outlined at BHP's half year results on the 23rd of February.

Now late last year, BHP's chairman Jacques Nasser said BHP's progressive dividend policy was not set in stone, that's where the dividend gets bigger each instalment.

But he did say it was a distinguishing feature for the company, but Fat Prophets resources analyst David Lennox told me that the future of the dividend is now on the table and the BHP board has to make some hard decisions given that scrutiny from Standard & Poors.

DAVID LENNOX: Look certainly they will revisit the company when it actually reports it's half year results, and then of course we'll get greater clarity around the company's financials and also how the profit/loss statement is travelling.

Look overall we do expect that the half year result, given the weakness that we have seen in commodity prices over the last six months, it will not unfortunately be a very good one and we do expect that revenue will be lower.

So look we do think that BHP will probably maintain the credit rating that Standard & Poors has put on it, but of course we will have to wait and see what the results look like towards the end of this month.

PETER RYAN: But do you think BHP Billiton will be able to maintain its progressive dividend policy for shareholders, given the concerns about the balance sheet from S&P?

DAVID LENNOX: Look you'd have to suggest that yes, BHP's balance sheet will certainly lose value with the impairment charges that they've flagged.

But we do think that they have over the course of the last two years actually been actively reducing their debt exposure inside their balance sheet, and even though as a proportion of the total balance sheet, debt will rise because values will fall, we do think that BHP is certainly comfortable a) to sustain the debt, and b) to ensure that it's credit is not substantially weakened any further.

PETER RYAN: So that progressive dividend is safe for now?

DAVID LENNOX: Look we certainly think that for the half year, they will probably pay out half of last year's full year dividend and then we would expect perhaps that the full year result come August, that the company will then look at what it will do.

It may not now continue to hold to a progressive dividend, but perhaps may go to a percentage of underlying profits. That does mean that dividends may become a little variable as profits obviously will vary.

ELEANOR HALL: That's resources analyst David Lennox with Peter Ryan.

Now Peter it's not just the world's biggest mining company - Standard & Poor's is also casting a critical eye on BHP's rival Rio Tinto. What's the situation there?

PETER RYAN: Well yes, S&P has placed Rio's A-minus rating on a negative watch, and like with BHP, it wants to see what Rio is actually doing to insulate itself from the commodities rout.

And as a result both BHP and Rio Tinto are down more than 1 per cent in late morning trade.

In the case of BHP, another slide in the oil price is a factor, but investors are very nervous about any sign that BHP's dividend might be about to fall.

Now this is important because most of are exposed to BHP through our superannuation, along with investors who hold BHP shares directly.

ELEANOR HALL: Indeed, Peter Ryan our business editor, thank you.