Fitch upgrades Interpipe, assigns B- rating to bonds

Fitch Ratings said it upgraded Interpipe Ltd.'s long-term issuer default rating to B-, removed the company from restricted default and assigned a B- senior secured rating to the company's eurobonds. The existing C senior unsecured rating has been withdrawn. The outlook on the long-term issuer default rating is stable.

The rating actions follow the conclusion of restructuring talks with bank debt and bondholders. The restructuring agreements provide for an extension and retranching of bank debt, and the $200 million eurobonds have been extended to August 2017. Mandatory debt repayments due in 2012-13 appear manageable to Fitch, but the agency said they have limited allowance for operational underperformance.

Fitch said it assesses Interpipe as having a viable business profile including a competitive cost profile and good market positions in its key segments of seamless pipes and railway wheels. The company will soon commission its new electric arc furnace, and this will resolve its key historical operational weakness, namely its lack of internal self-sufficiency in steel billets, the agency said.

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