Cliffs cut to Sell at Citigroup following asset writedowns• 12:26 PM

Carl Surran, SA News Editor

• Cliffs Natural Resources (CLF +1.6%) is higher despite a Citigroup downgrade to Sell from Neutral with a $5 price target in a valuation call on the iron ore and met coal miner.
• Citi sees iron ore unlikely to average much above $80/metric ton over the next couple of years, and says Friday's announcement of a covenant breach (max 45% debt to capitalization) and post-asset writedowns could force CLF to cut or eliminate its dividend as well as the stock buyback program.
• CLF is trying to JV or sell its Canadian and Australian mines, but the firm estimates that both currently are posting negative free cash, pressuring potential transaction values.