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Moody's ups Metals USA
Moody's Investors Service said it upgraded Metals USA Holdings Corp.'s corporate family rating and probability of default to B2 from B3 and affirmed its speculative grade rating at SGL-3. The rating on the 11 1/8% notes issued by subsidiary Metals USA Inc. was raised to B3 from Caa1.
The outlook was revised to stable from negative.
The upgrades were prompted by the company's initial public offering, which raised net proceeds of about $220 million, the majority of which was used to retire its floating-rate payment-in-kind toggle notes and pay accrued interest on the notes.
With North American steel demand and prices rising, Moody's said it is targeting the company's EBITDA at $70 million to $90 million for 2010, a dramatic improvement from nil in 2009.
However, increasing working capital is likely to consume much of this operating cash flow, the agency said.
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