Fitch affirms Mittal Steel

Fitch Ratings said it affirmed Mittal Steel Co. NV's issuer default and senior unsecured ratings at BBB and short-term rating at F2.

The outlook is stable.

This action comes after the recent U.S. Department of Justice ruling requiring the company to dispose of its Sparrows Point, Md., steel mill as a condition of its consent decree for Mittal Steel's merger with Arcelor SA. This removes the prospect of Mittal Steel being required to dispose of Dofasco to ThyssenKrupp AG, the agency said.

While the company's gross debt levels will initially be higher than had the sale of Dofasco proceeded, strong cash flow generation combined with asset disposal proceeds mean that its credit metrics should remain commensurate with the BBB rating level, Fitch said.

Fitch said it will continue to monitor developments in respect to Mittal Steel's offer to buy out the minority stakeholders in Arcelor Brasil SA. The agency said it has considered several possible outcomes in respect of Arcelor Brasil, and at present believes that Mittal Steel's ratings are unlikely to be affected. The ultimate outcome does, however, remain uncertain with Mittal Steel continuing to evaluate its options, Fitch added.

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