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Moody's lifts United States Steel from junk
Moody's Investors Service said it upgraded United States Steel Corp.'s senior unsecured bond ratings to Baa3 from Ba1 and withdrew its Ba1 corporate family and probability-of-default ratings and SGL-1 speculative grade liquidity rating.
This concludes the review for possible upgrade begun on Sept. 6, and the outlook is stable.
The agency said the upgrade reflects the company's reduced level of debt within its capital structure, its strengthened operating margins and coverage ratios and the benefits that accompany increased size and geographic diversification. Moody's said it believes that input costs have increased on a permanent basis, but United States Steel has demonstrated the ability to operate profitably, albeit modestly, at utilization rates that historically would have contributed to significant losses.
The stable outlook reflects the agency's expectations that the company's performance for 2007 will not be too dissimilar to the 2005 and 2006 periods, exhibiting a weaker first half and relatively stronger second half of the year, and that demand fundamentals for markets served and prices will remain at levels sufficient to result in acceptable earnings and cash flow generation.
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