Fitch: CSN ratings unaffected

Fitch Ratings said it views the proposed merger of Brazil-based Companhia Siderurgica Nacional SA's (CSN) North American operations with those of Wheeling-Pittsburgh Corp. to be neutral to CSN's credit quality and its rating, which include BB+ foreign-currency and BBB- local-currency issuer default ratings, an AA(bra) national scale rating, BB+ senior unsecured notes and AA(bra) Brazilian real-denominated debentures.

According to the announced agreement, CSN will contribute its cold rolling and galvanizing lines in Indiana and Wheeling-Pittsburgh will contribute its U.S. operations. CSN will also provide $225 million of financing that will be used to increase the new entities' galvanizing and hot rolling capacity.

Strategically, Fitch said it views the proposed transaction as positive for CSN, as it should improve the company's ability to export slabs to the U.S. market.

From a credit perspective, the transaction is slightly leveraging to CSN's overall credit profile, the agency said, as the new entity will have about $400 million of existing Wheeling-Pittsburgh debt and assuming CSN's $225 million loan to the new company will be converted to equity within the next three years.

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