Fitch: Ferroglobe notes B+

Fitch Ratings said it assigned an expected long-term issuer default rating of B- to Ferroglobe plc.

The agency also said it assigned an expected B+ rating to its senior unsecured rating and RR2 recovery rating to the proposed unsecured notes to be co-issued by Ferroglobe and subsidiary Globe Specialty Metals, Inc.

Both the issuer default rating and the senior unsecured bond rating also were placed on Rating Watch positive.

Fitch will assign final ratings following the successful conclusion of Ferroglobe's ongoing refinancing that includes a planned $350 million five-year notes placement, a change of the terms of the existing $200 million secured revolving credit facility and repayment of most existing debt at the subsidiary level.

The positive watch is pending the disposal of Spanish hydroelectric assets for about €255 million. The potential upgrade is limited to one notch only for both the issuer default rating and the senior unsecured rating.

The bond is to be guaranteed by the operating companies, which represent about 75% of the group's assets as of Sept. 30, 2016 and roughly 88% of the group's revenues in the first nine months of 2016 pro-forma for the Spanish hydro power assets sale, Fitch explained.

The agency also said it assumes the percentage of revenue earned by bond guarantors broadly corresponds to the percentage of their EBITDA in total group's EBITDA.

Ferroglobe's customer base is reasonably well diversified across steel, aluminum and chemical sectors, Fitch added.

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