S&P leaves Severstal on positive watch

Standard & Poor's said it kept its B+ long-term corporate credit rating on OAO Severstal on CreditWatch with positive implications.

The agency said that this follows the announcement by Arcelor SA (long-term rating BBB/Watch developing, short-term rating A-2/Watch negative) that it has agreed to the revised takeover terms offered by Mittal Steel Co. NV (BBB+/Watch negative).

S&P noted that the ratings on Severstal reflect uncertainty about Severstal's proposed merger with Arcelor, adding that it notes the potential benefits of a merger with a higher rated entity, but now considers the likelihood of this merger proceeding to be much reduced.

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