S&P: Ryerson Tull view now negative

Standard & Poor's said it revised its outlook on Ryerson Tull Inc. to negative from stable and affirmed its BB- corporate credit and B unsecured debt ratings.

S&P said these actions follow the company's recent announcement of a definitive agreement to purchase Integris Metals Inc., a large North American metals distributor, in a debt-financed transaction for $660 million (including assumed debt).

"The outlook revision reflects concerns regarding the relatively high EBITDA multiple of 7.9x that Ryerson is paying for Integris," said S&P credit analyst Paul Vastola. The acquisition will result in a significant increase in its debt and more than offset expected benefits to its business risk profile.

S&P said it anticipates that over the intermediate term the company will take actions to reduce its aggressive debt leverage, but inability to do so would result in a ratings downgrade.

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