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Moody's keeps G Steel on review for possible downgrade
Moody's Investors Service said Thailand-based G Steel PCL's B1 corporate family and senior unsecured debt ratings remain under review for possible downgrade, where they were placed on June 27 following G Steel's announcement that it would pay up to $180 million to procure Nakornthai Strip Mill PLC's convertible debt.
The agency said it will evaluate how the purchase may be financed and the subsequent impact on G Steel's financial profile. If the transaction proceeds as planned, Moody's will likely lower G Steel's ratings by one notch to B2.
While the agency acknowledged the strategic benefits of the proposed transaction, the lower rating would reflect the company's plan to raise up to $120 million of debt to partly fund the transaction, thereby weakening its credit metrics to a level that is more consistent with a B2 rating.
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