S&P: Erdemir view to negative

S&P said it revised the outlook on Eregli Demir ve Celik Fabrikalari TAS (Erdemir) to negative from stable.

The agency also said it affirmed the company’s BB long-term corporate credit rating.

The outlook revision follows a recent similar action on Turkey, S&P explained.

The sovereign outlook revision stemmed from the rising constraints on policy makers’ ability to tame inflationary and currency pressures, which could weaken the financial strength of Turkey's companies and banks, undermining growth and fiscal outcomes, the agency said.

That lower growth could result in significantly weaker credit metrics for Erdemir, S&P said.

Erdemir's operating performance remained robust in 2016 with a particularly strong third quarter following increases in steel prices during the year, the agency said.

Erdemir has continued to benefit from Turkey's flat steel industry's supportive supply and demand balance, S&P said, as well as the company's high capacity utilization rates and leading domestic market position.

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