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S&P drops Zlomrex to CCC+
Standard & Poor's said it lowered the long-term corporate credit rating on Zlomrex SA to CCC+ from B- and the short-term rating to C from B.
The agency also lowered the senior secured debt rating on €170 million 8½% callable bonds due 2014 issued by subsidiary Zlomrex International Finance SA and guaranteed by Zlomrex to CCC from CCC+. Ratings were removed from CreditWatch with negative implications, where they were placed on Jan. 8.
The outlook is stable.
According to S&P, the downgrade reflects Zlomrex's persistently weak liquidity, which exposes the company to ongoing high refinancing and default risks.
The agency said it regarded positively management's commitments to lower the net debt-to-EBITDA ratio to 3.5 times.
Ratings are constrained by the company's very limited liquidity, volatile working capital and high leverage, the agency noted.
Ratings are supported by the company's integrated steel operations, S&P said.
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