Fitch upgrades Usiminas

Fitch Ratings said it upgraded Usinas Siderurgicas de Minas Gerais SA's (Usiminas) long-term foreign and local currency issuer default ratings to B from CCC and national scale rating to BBB-(bra) from CCC(bra).

The agency also upgraded Usiminas' senior unsecured notes to B /RR4 from CCC/RR4.

The corporate ratings were assigned a stable outlook.

Fitch said the upgrade reflects the significant improvement in Usiminas' credit risk profile, supported by a deleveraging trend and manageable refinancing risks.

“It follows the final settlement of its debt restructuring plan, including capital injection (R$1 billion) and the upstreaming of cash from its jointly-controlled iron ore subsidiary (R$700 million),” Fitch said in a news release.

“Usiminas' operating performance has been showing significant improvement due to temporary closing of a mill and several cost reduction initiatives.

“The strong performance has also been mostly supported by improved product mix, rising steel prices and some recovery of flat steel demand in the Brazilian domestic market.”

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