Moody's upgrades Russel Metals

Moody's Investors Service said it raised Russel Metals Inc.'s corporate family rating to Ba1 from Ba2 and senior unsecured debt rating to Ba2 from Ba3. The outlook is stable.

Moody's said the upgrade reflects the company's tight control of operating costs, which bolsters its profit margins and cash flow, effective management of working capital, favorable liquidity profile and disciplined and successful track record with respect to acquisitions. These favorable fundamentals are enhanced by the recently concluded C$257.5 million equity offering.

While the agency does not expect Russel to retire a material amount of debt with the proceeds of the equity offering, the boost to equity lowers Russel's pro forma debt to total capital to about 21% from 28% and gives it a cash balance of about C$300 million.

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