Moody’s upgrades Erdemir

Moody's Investors Service said it upgraded the Turkish steel producer Erdemir's corporate family rating to Ba2, probability of default to Ba2-PD and national scale rating to A3.tr.

The outlook is stable.

"The upgrade was prompted by ongoing improvements in Erdemir's operating performance and credit metrics in 2014 and a further reduction in leverage," Hubert Allemani, Moody's vice president, senior analyst and lead analyst for Erdemir, said in a news release.

The strong performance was achieved in a declining raw material and pricing environment, with higher revenues and a continuation of strong operating margins of roughly 22% EBITDA margin on a Moody's-adjusted basis. Erdemir managed to improve its profitability thanks to lower iron ore prices and a further improvement of its crude steel capacity utilization ratio.

The agency believes that Erdemir is well positioned in its domestic and regional markets and can use its operating flexibility to keep its margins and cash flow relatively resilient.

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