S&P drops Ryerson

Standard & Poor's said it lowered its corporate credit rating to B+ from BB- on Ryerson Inc. and lowered its senior unsecured rating to B- from B.

The outlook is developing, reflecting the uncertainties associated with Ryerson's decision to retain an investment bank to explore strategic alternatives, the agency said.

"We believe Ryerson's decision is in response to the intention of hedge-fund Harbinger Capital to take control of the board of directors," said S&P credit analyst Thomas Watters.

"The downgrade reflects the persistence of poor operating performance by Ryerson relative to its some of its peers, high debt leverage, softening end-market demand, weak credit measures that have not met our expectations and concerns about working capital management - a critical factor in companies with this type of working-capital-intensive business model."

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