S&P drops Metals USA

Standard & Poor's said it lowered its corporate credit ratings on Metals USA Holdings Corp. and on its wholly owned subsidiary, Metals USA Inc., to CCC+ from B-.

At the same time, the agency said it lowered its rating on the senior secured notes and the senior unsecured pay-in-kind toggle notes to CCC- from CCC.

The recovery rating remains at 6 on these issues, indicating negligible recovery in the event of a payment default, the agency said.

The outlook is negative.

All ratings are removed from Creditwatch, where they were placed with negative implications on March 18, due to the sharp deterioration in steel market conditions in North America over the past several months and its expectation that operating conditions will remain challenging in the near-term, the agency added.

"The ratings downgrade reflects its assessment that the challenging operating environment will materially impact the company's near-term operating results. We believe that low metal prices and weak end market demand will lead to deterioration in credit metrics," said S&P credit analyst Maurice Austin.

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