S&P: Arcelor still on developing watch

Standard & Poor's said it kept its BBB long-term corporate credit rating on Arcelor SA on CreditWatch with developing implications, following the announcement by Arcelor that it has agreed to a revised takeover offer from Mittal Steel Co. NV (BBB+/Watch negative).

The A-2 short-term corporate credit rating on Arcelor remains on CreditWatch with negative implications, the agency said.

In the agency's view, the agreement by Arcelor's board of directors on Mittal's revised takeover significantly increases the likelihood that this transaction will proceed as proposed.

A degree of uncertainty about the eventual outcome, however, means that the ratings on Mittal and Arcelor remain on CreditWatch, S&P said, noting that this uncertainty is due to the pending vote from Arcelor's shareholders concerning the previously agreed merger of Arcelor with OAO Severstal (B+/Watch positive).

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