S&P affirms Usinas Siderúrgicas de Minas Gerais, rates Cosipa notes BB+

Standard & Poor's said it affirmed its BB+ long-term corporate credit rating on Usinas Siderúrgicas de Minas Gerais SA-Usiminas.

At the same time, the agency said it assigned its BB+ senior unsecured debt rating to the forthcoming $200 million Global MTNs due June 2016 to be issued by Cosipa Commercial Ltd.

The outlook is stable.

S&P said that the ratings on Usiminas reflect its exposure to the cyclical and volatile global steel sector, some reliance on the equally volatile economic and operating environment of its home market Brazil, increasing competition within the Brazilian steel industry and the risks associated with the company's significant capital expenditures program.

These risks are tempered by Usiminas' sound financial profile, with total debt levels and liquidity currently very conservative, a solid business profile, made evident by a very competitive cost structure, resilient operating profitability and robust free cash generation through economic cycles and a favorable market position in the fairly concentrated flat carbon steel sector in Brazil, in particular in the higher-end, quality products segments, the agency noted.

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