Moody's ups Cleveland-Cliffs

Moody's Investors Service said it upgraded Cleveland-Cliffs Inc.'s corporate family rating to Ba3 from B1, its probability of default rating to Ba3-PD from B1-PD, its guaranteed senior secured note rating to Ba2 from B1, its guaranteed senior unsecured note rating to Ba3 from B2 and its senior unsecured note rating to B2 from B3. The company's speculative grade liquidity rating was upgraded to SGL-1 from SGL-2.

"The upgrade of Cleveland-Cliffs ratings reflects the materially improved steel sector fundamentals, which will support a robust near term operating performance and solid free cash flow generation and lead to a sizeable debt pay down and a strengthening of its liquidity profile and sustainably stronger credit metrics." said Michael Corelli, a Moody's senior vice president and lead analyst for Cleveland-Cliffs, in a press release.

The agency noted Cliffs plans to generate about $5 billion in adjusted EBITDA assuming hot rolled coil prices average about $1,175 per ton during the remainder of 2021; however, this month prices were at $1,700 per ton.

The outlook is positive.

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