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Moody's raises some CSN ratings
Moody's Investors Service said it upgraded the foreign currency note ratings of Companhia Siderurgica Nacional (CSN) and CSN-backed foreign currency notes to Ba3 from B1 and affirmed CSN Iron SA's corporate family rating at B1. The outlook is positive.
In related rating actions, Moody's upgraded the global local currency rating of CSN to Ba2 from Ba3 and the national scale rating to Aa3.br from A3.br. The outlook for the global local currency and national scale ratings is stable.
More specifically, ratings upgraded include CSN's global local currency rating to Ba2 from Ba3, national scale rating to Aa3.br from A3.br on Brazilian debentures, and foreign currency rating to Ba3 from B1 on $200 million notes due 2008.
Moody's also raised CSN Iron SA's foreign currency rating on its 9.125% guaranteed bonds due June 2007 to Ba3 from B1, CSN Islands VIII Corp.'s foreign currency rating on its 9.75% guaranteed notes due December 2013 to Ba3 from B1, and CSN Islands IX Corp.'s foreign currency rating on its 10% guaranteed notes due January 2015 to Ba3 from B1.
Moody's said the upgrade in the global local currency rating reflects CSN's strengthened operating profile as evidenced by improved debt coverage ratios, moderation in leverage and ability to generate free cash flow through the steel cycle.
Favorable considerations in the rating are CSN's efficient and modern operations and market diversity as well as its captive raw material sources for key materials other than coal, Moody's said. However, the rating reflects the company's high payout level to shareholders relative to its earnings, cash flow generation and strategic investment requirements.
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