S&P boosts Zekelman

S&P said it upgraded its ratings for Zekelman Industries Inc. to BB+ from BB and its senior secured debt to BBB- from BB+. The 2 recovery rating on the debt is unchanged.

“The upgrade reflects a trend of solid earnings amid highly volatile steel prices, aided by strategic investments in various capital projects. Hot rolled coil (HRC) prices have cooled from previous years, reaching an average of $980 per short ton in 2022 and $1,000 per short ton in the first half of 2023, versus close to $2,000 per short ton in 2021. Despite softer prices, Zekelman generated record adjusted EBITDA close to $1.2 billion in 2022, and we project a similar performance in fiscal 2023,” S&P said in a press release.

The outlook is stable.

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