Fitch lowers Posco

Fitch Ratings said it downgraded Posco's long-term issuer default rating and senior unsecured rating to BBB+ from A-.

The agency also assigned a negative outlook. Posco's short-term issuer default rating was affirmed at F2.

The agency said the downgrade reflects deterioration in Posco's financial leverage so far in 2012 and 2011. The deterioration is a result of incurring high levels of debt to fund aggressive investments and weakened profitability.

Fitch now expects adjusted net debt to EBITDAR to exceed 3x in 2012 and 2013, which is well above the agency's previous negative rating guideline of 2x. The negative outlook reflects low visibility and uncertainty regarding the likely recovery of the steel industry recovery in 2013.

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