S&P ups Cleveland-Cliffs

S&P said it upgraded Cleveland-Cliffs Inc.’s issuer rating to B from B-, its senior secured debt to BB- from B and its guaranteed unsecured and nonguaranteed subordinated debt to CCC+ from CCC. The agency revised the secured debt’s recovery rating to 1 from 2. The subordinated debt’s 6 recovery rating is unchanged.

“Strong steel demand conditions synchronized with company's commitment to repay debt. We expect Cliffs' adjusted leverage will decline to just under 2x by year-end 2021. We also anticipate Cliffs will benefit from strong steel demand in the U.S., supported by measured domestic production growth and import protection policies that are in place for the remainder of 2021,” S&P said in a press release.

The agency said it forecasts Cliff’s adjusted EBITDA in the upper end of the $4 billion-about $5 billion range for fiscal year 2021 and for it to repay about $2 billion in debt by Dec. 31.

The outlook is positive.

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