S&P lifts Tata Steel view to positive

S&P said it revised the outlook on Tata Steel Ltd. and its subsidiary, ABJA Investment Co. Pte. Ltd., to positive from stable.

The agency also said it affirmed the BB- long-term issuer credit ratings on the companies, as well as the BB- long-term issue rating on the various dollar-denominated senior unsecured notes issued by ABJA Investment.

Continued stable outlook for Indian steel prices is likely to keep Tata Steel Ltd.'s earnings robust over the next 12 months, S&P said.

The agency said it no longer expects Tata Steel to be able to acquire Bhushan Power and Steel Ltd., therefore Tata Steel's credit ratios are likely to move higher than the upgrade trigger in the next 12 months.

The positive outlook reflects a view that stable steel prices and improvements in earnings, combined with an expectation on the Bhushan Power and Steel transaction, are likely to improve Tata Steel's credit ratios over the next 12 months, S&P said.

Tata Steel to gain from sustained high steel prices in the world's second largest steel market, given its low cost position and dominant market share, the agency said.

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