S&P affirms Steel Dynamics

S&P said it affirmed its BB+ corporate credit rating on Steel Dynamics Inc. The outlook remains stable.

At the same time, S&P affirmed its BB+ issue-level rating on the company's senior unsecured notes. The recovery rating on the notes remains 3, indicating an expectation for meaningful (50% to 70%; at the upper end of the range) recovery in the event of a payment default.

“Our stable outlook on Steel Dynamics reflects our expectation for satisfactory revenue growth and a substantial EBITDA contribution from the Columbus mill in the next 12 months despite difficult industry conditions,” said S&P credit analyst Patricia Mendonca in a news release. “We forecast a decline in adjusted leverage to about 2.8x for fiscal year 2016, compared with 3.1x for 2015. We also believe that the company's growth goals will generally keep leverage under 3x.”

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