Moody’s raises Usiminas to Caa2

Moody's Investors Service said it upgraded the senior unsecured notes ratings of Usiminas Commercial Ltd. (guaranteed by Usinas Siderurgicas de Minas Gerais SA) to Caa2 from Ca and the ratings of the backed senior unsecured global medium-term note programs of Usinas Siderurgicas de Minas Gerais, Cosipa Commercial Ltd. and Usiminas Commercial Ltd. to provisional Caa2 from provisional Ca.

The outlook is stable.

At the same time, Moody's America Latina upgraded Usiminas' corporate family rating to Caa2 from Ca (global scale) and to Caa2.br from Ca.br (national scale), with a stable outlook.

Moody’s said the upgrade of Usiminas' ratings to Caa2 reflects primarily the conclusion of a debt restructuring in September and a R$1 billion capital increase in July, which reduced liquidity pressures in the short-term and will allow the company to focus more closely on its operations.

Usiminas’ negotiation with creditors representing 92% of its total debt concluded with a payment extension of up to 10 years, with a three-year grace period.

The Caa2 ratings continue to incorporate the likely default, per Moody's definition, on the bonds due 2018 following a planned exchange offer that would lead to changes in the notes' terms and conditions as announced in November 2016.

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