BHP Billiton's credit ratings fragile in FY16, agencies warn

* Dividend seen stretching balance sheet

* Commodities prices need to improve to ease pressure

* BHP's S&P rating at 'A+', Moody's at 'A-1' (Adds Moody's comment)

MELBOURNE, Aug 26 (Reuters) - BHP Billiton (NYSE: BBL - news) 's investment-grade credit ratings might come under pressure in the current financial year, ratings agencies said on Wednesday, after the top global miner posted its weakest profit in a decade but still hiked dividends.

While BHP has long sought to protect its 'A+' rating by Standard (Other OTC: SNDH - news) and Poor's and 'A-1' rating by Moody's, it reiterated a pledge on Tuesday to never cut its dividend through the highs and lows of commodity price cycles.

But both ratings firms said that with commodity prices likely to remain weak in the fiscal year to June 2016, the company's debt to earnings balance may temporarily put it out of the range needed to hold on to its ratings.

S&P said its 'A+' rating could withstand a dip in earnings ratios as long as the agency believed those metrics would recover by the following fiscal year.

"Should the weak trading environment persist further, the recovery in credit metrics is unlikely to occur based on BHP Billiton's earnings alone," it said.

Both agencies said even with BHP's sharp cut in capital spending and plans to pare costs beyond the $4.1 billion already slashed in the 2015 financial year, funding the dividend from cash flow would be a challenge if commodity prices worsened.

"This would place further pressure on credit metrics and the rating," Moody's said. (Reporting by Sonali Paul; Editing by Richard Pullin and Muralikumar Anantharaman)