Moody's cuts ArcelorMittal

Moody's Investors Service said it changed its outlook for ArcelorMittal to negative from stable.

The agency said it affirmed ArcelorMittal's Baa3 senior unsecured rating, its P-3 commercial paper rating and its Baa3 rating for debt issued by ArcelorMittal, ArcelorMittal Finance and ArcelorMittal USA.

Moody's said the change in outlook reflects Moody's more negative appraisal of worldwide steel market conditions over the next six months, in combination with ArcelorMittal's relatively weak credit metrics.

"With the company's near-term operating performance more likely to decline than improve, progress toward strengthening leverage and cash flow ratios depends on debt reduction, which relies on asset sales or credit-protection measures. The company is taking steps to reduce debt and improve operating performance, however, the challenging economic and steel industry environment may undermine the full force of these credit-reinforcing actions," said Steve Oman, Moody's senior vice president-lead analyst for the steel industry, in a news release.

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