Moody's ups AK Steel liquidity

Moody's Investors Service said it upgraded AK Steel Corp.'s speculative grade liquidity rating to SGL-1 from SGL-2.

The revision is prompted by the company's continued strengthening of its liquidity position, unused credit facility availability and Moody's expectation that AK Steel will be able to finance its operating and capital costs from internal cash flow and existing cash balances over the next 12 months, the agency said.

Moody's noted the SGL-1 rating is supported by AK Steel's cash balances of $266 million at June 30, principally reflective of proceeds retained from asset sales, a portion of which were used to repay outstandings under the company's credit facilities and to redeem the remaining $62.5 million in senior secured notes that were due in December 2004. Further support is provided by the company's $400 million revolver secured by inventory and a $300 million accounts receivable purchase facility, recently extended for a three-year term.

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