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S&P rates US Steel notes BB+
Standard & Poor's said it assigned United States Steel Corp. (BB+/negative) a BB+ rating to its proposed offering of up to $400 million in senior unsecured notes due Feb. 1, 2018.
Proceeds are expected to be used to refinance a one-year bridge loan for the acquisition of Stelco Inc.
Ratings reflect the integrated steel producer's capital-intensive operations, exposure to highly cyclical and competitive markets, increased input costs, a high degree of operating leverage and aggressive financial leverage, including underfunded postretirement benefit obligations, the agency said.
Ratings also reflect the company's liquidity, value-added product mix, scope and breadth of product and operations, and benefits from its backward integration into iron ore and coke production, S&P said.
Moody's rates US Steel notes Baa3
Moody's Investors Service said it assigned a Baa3 rating to United States Steel Corp.'s $400 million senior unsecured notes issuance and affirmed the Baa3 senior unsecured ratings.
The outlook is stable.
Proceeds will be used to refinance a $400 million one-year term loan, which helped finance the acquisition of Stelco Inc. on Oct. 31.
US Steel's Baa3 senior unsecured ratings reflect the company's position as a leading North American producer of flat-rolled steel, enhanced by its production capacity in Central Europe, its significantly improved financial profile, solid coverage ratios and its manageable leverage profile, the agency said.
Ratings also acknowledge the significant change in the company's business footprint characterized by broader geographic diversity, increased market position and an improved legacy cost liability situation, Moody's said.
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