S&P downgrades Tata Steel

Standard & Poor’s said it lowered the long-term corporate credit rating on Tata Steel Ltd. to BB- from BB, along with its guaranteed senior unsecured notes to BB- from BB.

ABJA Investment Co. Pte. Ltd. issued the notes.

The outlook is stable.

The downgrades reflect Tata Steel’s weak cash flows and compressed profitability, which are expected to keep its leverage high over the next 12 to 18 months, S&P said.

Tata Steel’s financial risk profile was revised to highly leveraged from aggressive, reflecting the company’s weakened cash flow leverage ratios, the agency said.

Subdued demand and low steel prices have kept operating performance weak at Tata Steel’s India and European operations, S&P said.

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