Fitch upgrades U. S. Steel notes

Fitch Ratings said it upgraded the senior unsecured notes of United States Steel Corp. to CCC+/RR5 from CCC/RR6.

“The upgrade of the unsecured notes is due to the issuance of $500 million of unsecured notes with proceeds used to redeem secured notes in addition to an equity offering of approximately $700 million with proceeds to be used to redeem 35% of the secured notes due 2025 and for general corporate purposes, which may include the repayment of indebtedness. The permanent reduction of secured notes leads to an improved recovery for the unsecured notes,” the agency said in a press release.

Fitch affirmed U. S. Steel’s long-term issuer default rating at B-, ABL credit facility at BB-/RR1 and secured notes at BB-/RR1.

Fitch also revised U. S. Steel’s outlook to stable from negative. “The stable outlook reflects improving domestic steel market conditions including the faster-than-initially-anticipated automotive recovery in addition to U. S. Steel’s comfortable liquidity position bolstered by its recent approximately $700 million equity offering,” Fitch said.

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