Moody's downgrades Erdemir

Moody's Investors Service said it downgraded Erdemir's corporate family and probability-of-default ratings to B2 from Ba3 and its national scale rating to Baa3.tr from Baa1.tr.

The outlook is stable.

The action was prompted by the significant downturn in the steel industry, which has affected Erdemir's leverage ratios, profitability and short-term liquidity situation.

The stable outlook reflects expectation that Erdemir in the current year will be able to generate positive free cash flow despite the weak economic environment, and that over time the gross adjusted debt-to-EBITDA ratio will improve to a level of around 3.5x, according to the agency.

The action also considers the weak short-term liquidity situation of Erdemir, the agency said.

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