Fitch affirms Mittal Steel

Fitch Ratings said it affirmed Mittal Steel Co. NV's issuer default and senior unsecured ratings at BBB and its short-term rating at F2 following the acceptance by the Comissao De Valores Mobiliarios, the Brazilian securities regulator, of the terms of Mittal Steel's revised tender offer to purchase the remaining 34% of shares in Arcelor Brasil SA that it does not currently own.

The outlook is stable.

The agency said it previously factored into its ratings an allowance for the buyout of the minority stake in Arcelor Brasil, with the increased level of cash payable under the revised offer not expected to have a material negative impact on the group's credit metrics. Consideration under the revised offer is payable in a mixture of cash (30%) and shares (70%), or cash only. The cash-only value will be determined using the same ratio of cash and shares as the mixed option.

Based on recent market prices for Mittal Steel's shares, the maximum cash outlay, assuming 100% acceptance of the cash-only option, would be approximately R$10.9 billion, Fitch said.

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