S&P boosts Mittal Steel

Standard & Poor's said it raised its long-term corporate credit ratings on Mittal Steel USA Inc. and its financial vehicle Ispat Inland LP to BBB from BBB- after parent Mittal Steel Co. NV (now referred to as Arcelor-Mittal, BBB/stable) provided a full and unconditional guarantee on the U.S. operating subsidiary's $500 million bonds.

The outlooks are stable.

At the same time, the ratings were removed from CreditWatch, where they were placed with positive implications on Feb. 28, following the parent's offer - subject to the noteholders' approval - to cease reporting at the subsidiary level and provide a guarantee on the subsidiary's bonds, the agency said, adding that noteholder approval has now been obtained.

The upgrade reflects S&P's view that the guarantee effectively limits the exposure of the senior unsecured creditors of the U.S. subsidiary to the credit risk of the parent.

In addition, North America is a strategically important market for Arcelor-Mittal, responsible for about a quarter of total production. Mittal Steel USA is closely integrated within the Arcelor-Mittal group and is managed together with another North American asset of the group, Dofasco Inc. (BBB/stable), S&P said.

Therefore, the rating on Mittal Steel USA is now equalized with that of the parent, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.