S&P lowers Tube City loan to B+

Standard & Poor's said it lowered Tube City IMS Corp.'s senior secured term loan to B+ with a recovery rating to 3 from BB with a recovery rating to 1 and affirmed its other ratings, including its B+ corporate credit rating.

The ratings were removed from CreditWatch, where they were placed with negative implications on Nov. 14, and the outlook is negative.

The agency said the affirmation and CreditWatch removal reflect its expectation that Tube City's liquidity will remain adequate despite the challenging operating conditions in the steel industry that will likely continue during much of 2009 given the combination of weak end-market demand and low production utilization rates.

The ratings on Tube City balance its vulnerable business risk profile due to its limited diversity, exposure to the cyclical steel industry and customer concentration against its stable revenues and cash flow provided through long-term contracts, a favorable niche business position and good margins, the agency said.

The negative outlook reflects S&P's expectation that the company's overall financial profile will deteriorate somewhat during 2009 as a result of the ongoing weakness in the global steel market.

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