S&P affirms Siderurgica Nacional

Standard & Poor's said it affirmed its BB local- and foreign-currency corporate credit ratings on Companhia Siderúrgica Nacional and removed them from CreditWatch, where they were placed Nov. 17 with negative implications.

The outlook is stable.

The resolution follows the completion of the auction process for Corus Group plc (BB/watch negative), during which Tata Steel Ltd. (BB/watch negative) offered the highest bid of 608 pence per share, beating Siderurgica Nacional's competing offer of 603 pence per share.

The rating reflects the company's significant gross debt leverage, aggressive capital expenditures in steel and iron ore expansion, exposure to volatile demand and price cycles and increasing competition in its home and predominant market of Brazil, S&P said.

These risks are offset by the company's privileged cost position and sound operating profile, favorable market position in Brazil, strong export capabilities to offset domestic demand slowdowns and increasing business diversification, the agency added.

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