Moody’s lowers Usiminas to Ca/Ca.br

Moody's America Latina said it downgraded Usinas Siderurgicas de Minas Gerais SA (Usiminas) corporate family ratings to Ca from Caa1 (global scale) and to Ca.br from Caa1.br (national scale).

The outlook is stable. This concludes the review process initiated on Jan. 27.

Moody’s said the downgrade to Ca reflects primarily the standstill agreement that has suspended principal payments of Usiminas' debt and covenant compliance requirements for 120 days (starting on March 18). Usiminas intends to negotiate new terms with creditors and extend maturities for all debt due in 2016, 2017 and 2018. This agreement constitutes a missed payment default per Moody's definition.

Moody's believes the company has an untenable capital structure and any distressed restructuring likely to entail significant losses to the bondholders.

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