S&P downgrades Usiminas, debt

Standard & Poor's said it downgraded Usinas Siderurgicas de Minas Gerais SA (Usiminas) to CCC+ from B+ on global scale and to brCCC+ from brBBB- on national scale.

The agency also placed the ratings on CreditWatch negative.

The recovery rating was revised to 5H from 3L, which reflects recovery prospects of 10% to 30%, in the high end of the band. The weaker recovery prospects prompted the agency to lower the unsecured debt ratings on the company to CCC from B- and to brCCC from brBBB-.

S&P said the downgrade follows Usiminas' very weak operating results in the second half of 2015, which combined with higher leverage and interest burden, sharply weakened credit metrics and liquidity. The agency doesn't expect the Brazilian steel market to improve in 2016, which will continue to pressure Usiminas' cash flows.

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