S&P lowers Essar Steel loan

Standard & Poor’s said it lowered the rating on Essar Steel Algoma Inc.’s $350 million asset-based loan facility to D (default) from CCC+.

The agency also said it removed the rating from CreditWatch, where it was placed with developing implications in August.

The SD (selective default) corporate credit rating on Essar and CCC+ rating its senior secured notes are unchanged.

The downgrade reflects the missed principal repayment on the company’s asset-backed loan, which was due Sept. 20, S&P said.

The maturity of the loan is not subject to a grace period and the agency said it does not expect payment within five business days, which is considered an event of default.

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