Credit rating agency Fitch increased the long-term foreign and local currency issue default ratings (IDR) of Brazil’s flats producer Usiminas to CCC from RD, following an improvement in the company’s financial profile.
According to Fitch, the upgrades reflect the improvement of Usiminas' “financial flexibility,” following the completion of its debt restructuring and a capital injection.
“Due to the rescheduling of the maturity dates of 92 percent of the company's debt, it is now in a better position to withstand the severe downturn in Brazilian steel demand,” the credit rating agency said, adding the new ratings assume the company will comply with the requirements it agreed to in the debt agreement it signed with creditors.
Fitch also said it expects Usiminas will also have access to at least BRL 700 million in cash held at is mining arm, Mineracao Usiminas S.A. (Musa), a 70 percent JV with Sumitomo, by June 2017.
On the negative side, Fitch said the ongoing disputes involving Ternium and Nippon Steel will “continue to negatively overhang Usiminas' ratings.”