S&P lowers Evraz North America

Standard & Poor’s said it lowered its long-term foreign-currency and local-currency corporate credit ratings on North American steel producer Evraz North America plc to B+ from BB-. The outlook is stable.

At the same time, S&P lowered the issue-level rating on the company’s $350 million senior high-yield bond to BB from BB+. The recovery rating on the bond remains 1, indicating very high (90%-100%) recovery in a default scenario.

Evraz North America, which is domiciled in the U.K., is a 100% subsidiary of Russian integrated steel-maker Evraz Group SA.

“The downgrade reflects a significant weakening of ENA’s operating and financial performance in the first half of 2015 due to a depressed steel price environment and weaker demand for steel products, in particular, in the tubular segment,” said S&P credit analyst Svetlana Ashchepkova in a news release.

“In addition, ENA’s second-quarter EBITDA was hurt by an inventory write-down and mark-to-market slab cost,” she added.

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