Fitch upgrades U.S. Steel to B

Fitch upgraded United States Steel Corp.’s long-term issuer default rating to B from B-.

The rating outlook has been revised to positive from stable.

Fitch has also upgraded the ABL credit facility to BB/RR1 from BB-/RR1 and upgraded the senior unsecured notes and environmental revenue bonds to B/RR4 from CCC+/RR5.

The upgrade reflects the faster than anticipated economic recovery following the pandemic's impact on the economy in 2020, leading to significantly improved domestic steel market conditions and expected EBITDA generation. The ratings also reflect U. S. Steel's acquisition of the remaining interest in Big River Steel Holdings LLC in the first quarter, which is expected to lower the company's overall cost position.

The positive outlook reflects Fitch's expectation that total debt/EBITDA will be significantly lower in 2021 compared with 2020 and for the company to use excess cash to prioritize debt repayment in the near-term leading to total debt/EBITDA sustained below 4x. The Positive Outlook also reflects solid domestic steel market conditions, including historically high prices and solid demand, which should lead to the generation of significant cash resulting in meaningful deleveraging capacity.

The two-notch upgrade of the unsecured notes reflects U. S. Steel repaying $1.056 billion of secured notes in the first quarter leading to a better recovery of the unsecured notes in the recovery waterfall.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.