S&P upgrades Aperam, convertibles to BB+

Standard & Poor's said it raised its long-term corporate credit rating on Aperam SA to BB+ from BB.

The outlook is stable.

At the same time, the agency raised its issue ratings on Aperam's convertible notes, including its $200 million senior unsecured convertible bonds maturing 2020 and its $300 million senior unsecured convertible bonds maturing 2021, to BB+ from BB. The recovery rating remains unchanged at 3, indicating expectations of meaningful recovery prospects with coverage in the higher half of the 50%-70% range for the debtholders in the event of a payment default.

S&P said the upgrade reflects Aperam's continued earnings resilience through 2015 against very challenging industry conditions for steel and stainless products.

The agency also takes into account the company's conservative balance sheet, showing only moderate debt levels.

Additionally, S&P factors in the company's strict financial policy, which the company announced together with third quarter results, targeting less than 1 time unadjusted net debt to EBITDA through the cycle, despite a generous dividends commitment, which the agency believes free cash flows should cover. Cash and availability of credit lines also provide the company with strong liquidity, in S&P’s view.

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