BRASILIA (Reuters) - Standard & Poor's cut Brazilian miner Samarco Mineracao SA's debt rating further into speculative territory on Monday as the deadly dam disaster compromises the finances of the joint venture owned by BHP Billiton (>> BHP Billiton Limited) and Vale SA (>> Vale SA).

S&P cut Samarco's global scale corporate credit to 'BB-' from 'BB+', both non-investment grade ratings, and kept its credit watch negative, which means it could downgrade the iron-ore miner even further.

"These actions reflect Samarco's difficulties to recover its operations, potential fines, and weak cash flows that are undermining the company's financials and boosting liabilities," S&P said in a statement.

The rating agency had threatened to cut Samarco's rating after the Nov. 5 accident in which a mudflow from a burst tailings dam killed at least a dozen people, left hundreds homeless and polluted nearby rivers across several states.

Samarco halted its iron-ore operations after the accident and Brazilian authorities have announced an initial fine of 250 million reais (£44.3 million). Government officials have said the total bill for the company will be significant larger.

(Reporting by Alonso Soto; Editing by Sandra Maler)

Stocks treated in this article : BHP Billiton plc, BHP Billiton Limited, Vale SA