S&P lifts Essar Steel Algoma, rates PIK notes CCC+

Standard & Poor’s said it raised its long-term corporate credit rating on Essar Steel Algoma Inc. to B- from SD (selective default) following completion of the company’s refinancing and recapitalization process. The outlook is stable.

At the same time, S&P finalized its B+ issue-level rating and 1 recovery rating on Essar Steet Algoma’s $50 million senior secured revolving asset-based loan, $375 million term loan and $375 million notes. A 1 recovery rating indicates an expectation of very high (90%-100%) recovery in a default scenario.

S&P also assigned its CCC+ issue-level rating and 5 recovery rating to the company’s new $252 million junior secured payment-in-kind notes, which replace the previously proposed junior secured notes. A 5 recovery rating indicates an expectation of modest (10%-30%) recovery in the event of default (in the lower half of the recovery range).

In addition, S&P withdrew the preliminary B- issue-level rating and 4 recovery rating on the company’s previously proposed junior secured notes, which were not issued. Finally, S&P withdrew the D ratings on Essar Steel Algoma’s senior secured and senior unsecured debt, along with the respective 1 and 5 recovery ratings on the debt.

“The upgrade on ESA reflects the completion of the company’s debt refinancing and other restructuring-related transactions, which will facilitate ESA’s emergence from creditor protection with a new capital structure,” said S&P credit analyst Jarrett Bilous in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.