S&P upgrades Erdemir

Standard & Poor's said it raised the long-term corporate credit rating on Eregli Demir ve Celik Fabrikalari TAS (Erdemir) to B from B-.

The outlook is stable.

The upgrade reflects a revision of Erdemir's financial risk profile to aggressive from highly leveraged, S&P said.

The decision factors in company's large investment program, which has boosted financial performance significantly in the past 18 months and better positions the company to deal with increasing domestic competition, the agency said.

As a result, the company can establish itself in export markets and is better positioned to withstand a potential downturn in the global or European economy, S&P said, or a tougher Turkish market for flat steel products in the next one to two years.

The ratings also consider the company's cyclical and capital-intensive steel business, which is subject to cost pressures due to volatile iron ore and coking coal prices, cyclical demand and risk of oversupply, the agency added.

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