S&P affirms DBO

Standard &Poor's ratings Services affirmed its ratings, including its B+ corporate credit rating, on DBO Holdings.

At the same time, the agency said it removed all ratings on DBO Holdings from Creditwatch, where they were initially placed with positive implications on Aug. 13, following the company's announcement that it agreed to be acquired by OJSC Novolipetsk Steel (BBB-/stable) for $3.5 billion.

The outlook is stable.

The agency said that the affirmation and Creditwatch removal reflect its assessment that despite the high likelihood that weaker steel demand will hurt the company's operating performance over the next several quarters, it expects its credit measures to remain at a level we would consider to be in line with the rating.

Specifically, the agency said it expects debt to EBITDA, adjusted for operating leases, to remain below 4.5x while the rating on DBO Holdings reflects the cyclical nature of the company's end markets, its significant reliance on nonresidential construction spending, and its moderately aggressive financial profile, as well as the threat of increased imports due to a stronger dollar.

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