S&P upgrades Metals USA

Standard & Poor's said it raised its ratings on Metals USA Holdings Corp. and Metals USA Inc. to B- from CCC+.

The ratings remain on CreditWatch with positive implications, where they were placed on April 7.

S&P said the upgrade reflects its assessment that near-term operating performance is improving due to increased end-market demand, resulting in higher pricing and volumes. As a result, the agency expects the company's credit measures to strengthen to a level more consistent with a higher rating - specifically, an adjusted debt-to-EBITDA ratio of less than 5 times.

In addition, the proceeds of the recently completed initial public offering are expected to be used to repurchase the maximum principal amount of the company's payment-in-kind toggle notes - a move that S&P said will likely result in a further improvement to Metals USA's capital structure and credit measures in the near term.

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