Fitch keeps ThyssenKrupp on watch

Fitch Ratings said it kept ThyssenKrupp AG's long-term issuer default rating of BB+ and short-term issuer default rating of B on rating watch positive.

The senior unsecured notes and commercial paper program – rated at BB+ and B, respectively – also remain on positive watch.

Fitch said the action follows ThyssenKrupp’s announcement that it signed a definitive agreement with Tata Steel Ltd. (BB/rating watch evolving) to create a 50/50 steel joint-venture, which will significantly transform the company's business profile and risk exposure.

This action reflects that the transaction has yet to be closed and is subject to regulatory clearances (primarily in the European Union) and the process of carving out assets, the agency explained.

Fitch placed the ratings on positive watch on Sept. 22, 2017 after the announcement of the signing of a Memorandum of Understanding, which underpinned both parties' convergence of will and indicated an intended common line of action between ThyssenKrupp and Tata Steel to contribute their European steel assets to a 50/50 joint-venture.

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