Fitch upgrades Tata Steel

Fitch Ratings said it upgraded Tata Steel Ltd.'s issuer default rating to BBB- from BB+. The agency also raised the rating on the $1 billion notes due July 2024 issued by TSL's subsidiary, ABJA Investment Co. Pte. Ltd., and guaranteed by TSL, to BBB- from BB+.

“The upgrade follows a revision in TSL's stand-alone credit profile (SCP) to bb+ from bb on the reduction in uncertainty and financial risk from its U.K. operations. TSL will replace its blast furnaces with more cost-efficient and environment-friendly electric arc furnace (EAF)-based steelmaking capacity. Consequently, we expect the U.K. operations' cost competitiveness to improve. TSL's IDR continues to benefit from a one-notch uplift from potential support from the Tata Group,” Fitch said in a press release.

The agency said it expects TSL’s EBITDA leverage to fall over the next three years on higher capacity, output and EBITDA.

The outlook is stable.

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