S&P ups Hylsa ratings

Standard & Poor's raised its local currency and foreign currency corporate credit ratings on Hylsa SA de CV to B from CCC+ and also raised the senior unsecured debt rating on Hylsa to CCC+ from CCC-.

The outlook is stable.

S&P credit analyst Juan P. Becerra said, "the rating action is based on the company's increasing revenues due to a better product mix and higher price environment, effective cost control, positive free cash flow generation, and significant debt reduction of 11.6% so far this year."

S&P said the ratings on Hylsa reflect its high leverage, the challenges posed by industry cyclicality, very competitive steel markets and significant exposure to the automotive and construction industries.

The ratings also reflect the company's position as one of the largest steel makers in Mexico, improved local market demand, improving cost position and expected debt reduction with cash flows from the improved pricing environment in global steel markets.

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