S&P lifts Kloeckner debt, lowers view to negative

Standard & Poor's said it revised the outlook on Kloeckner & Co. SE to negative from stable.

The agency also said it affirmed the company's B+ long-term corporate credit rating.

S&P also said it raised the rating on the senior unsecured debt instruments issued or guaranteed by Kloeckner to B+ from B.

The upgrade is based on a revision of the recovery rating on these instruments to 4 from 5. The 4 rating indicates 30% to 50% expected default recovery while the 5 rating indicates 10% to 30% expected default recovery.

The outlook revision reflects the currently weak economic environment and a one-in-three possibility that Kloeckner's credit metrics will not improve in 2014 to levels considered commensurate with the current ratings, S&P said.

The ratings consider the continued frail macroeconomic and steel distribution industry environments in Europe, only partly mitigated by slightly more supportive operating conditions for Kloeckner's U.S. operations, the agency said.

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