Fitch Ratings has downgraded United States Steel Corporation's (US Steel) issuer default rating (IDR) rating. As announced by Fitch on January 27, the following ratings are now valid for the company:
- Issuer default rating (IDR): to BB+ from BBB-
- Senior secured credit facility: to BBB- from BBB
- Senior unsecured notes: to BB+ from BBB-
- Rating outlook: stable from negative.
Fitch believes that free cash flow will be negative for US Steel in 2010 and the ratings carry the possibility that the company will seek external financing in the near term for some portion of its capital spending over the next 24-36 months.
The downgrade of the IDR reflects lack of visibility into the strength of the recovery and the timing of US Steel's return to profitability, Fitch said, adding that the ‘stable' rating outlook reflects the view that US Steel's liquidity is sufficient to support operations should the recovery remain weak for the next 12-18 months.