International credit rating agency Moody’s has announced that it has upgraded the long-term issuer rating of global steel giant ArcelorMittal to Baa3 with a stable outlook.
Moody’s stated that the upgrade of ArcelorMittal's ratings to Baa3 reflects its expectation that the company will maintain a strong operating performance and will continue to reduce its leverage to be able to maintain investment grade metrics under a number of stress scenarios across the cycle. Management's focus on strengthening the balance sheet, coupled with strong current trading results expected in the first half of the current year after a solid first quarter, should create the financial flexibility to deliver this, according to Moody’s.
Meanwhile, the stable outlook on the ratings reflects Moody's view that ArcelorMittal will continue to use its cash flow generation and cash balances to reduce debt and build resilience in its financial profile, and that investment and M&A commitments, such as for Italy-based steel producer Ilva and possibly Indian steelmaker Essar Steel, will be managed prudently.