Moody's assigns JSW Steel notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to the proposed senior unsecured notes to be issued by Periama Holdings LLC, a wholly owned indirect subsidiary of Ba2-rated JSW Steel Ltd., which will guarantee the notes.

Proceeds will be routed to JSW through the repayment of an intercompany loan and are expected to be used to repay indebtedness at JSW and for general corporate purpose.

The outlook is negative.

“Proforma the proposed bond, JSW's leverage, as measured by debt/EBITDA, will increase to 6.9x as of June 2020 from 6.5x without the bond, although the increase in leverage maybe lower to the extent the company applies the bond proceeds towards debt reduction. Looking ahead, improving economic conditions in India will drive a reduction in the company's leverage to 6.4x by March 2021, the metric will remain in breach of its 4.5x downgrade trigger for its Ba2 CFR, supporting the negative outlook on the rating,” Moody’s said in a press release.

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