Moody's rates Steel Dynamics bonds Ba2

Moody's Investors Service said it assigned a Ba2 rating (LGD5, 77%) to Steel Dynamics Inc.'s $500 million senior unsecured guaranteed bond/debenture.

Moody's affirmed the issuer's Ba1 corporate family and probability-of-default ratings and the Ba2 ratings on guaranteed senior unsecured bonds and debentures and on its convertible subordinated notes.

The outlook is stable.

Proceeds will help finance the proposed acquisition of OmniSource.

Pro forma for acquisitions the company's debt-to-EBITDA ratio is expected to be about 1.7 times.

Moody's said the Ba1 corporate family rating reflects robust steel prices and the company's low-cost mini-mill operating structure, which contributes to strong earnings, growing production capabilities and improving product mix.

Factors limiting the rating are the company's modest size relative to investment-grade steel producers, the secured nature of its credit facility and the company's acquisition-driven growth strategy, according to the agency.

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