S&P upgrades Usiminas

S&P said it raised its global scale corporate credit ratings on Usinas Siderurgicas de Minas Gerais SA (Usiminas) to B- from CCC+ and raised the Brazilian national scale rating to brBB from brB-.

The outlook is positive.

The agency also raised the issue-level rating on Usiminas' senior unsecured notes due 2018 to CCC from CCC- and raised the rating on the company's senior secured debentures to brBB from brB-.

The rating on the senior unsecured notes is two notches below the corporate credit rating, reflecting a recovery rating of 6 given the low recovery expectation of 0%-10%.

The recovery rating on the senior secured debt remains 4 and reflects the average recovery expectation of 30%-50% (45%, rounded), which supports the rating at the same level of Usiminas' national scale corporate credit rating.

S&P said the upgrade follows Usiminas' recent agreement with debt holders to waive the requirement for an exchange offer for its 2018 senior unsecured notes and to repay that debt at maturity in January 2018. This is the only relevant debt maturity for the next two years after the debt-restructuring plan.

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