Credit rating agency Moody’s said on Monday it upgraded both the global and the local ratings of Companhia Siderurgica Nacional (CSN) to B2 from B3, and to Ba1.br from B2.br, respectively, on a stable outlook.
Moody’s said the upgraded ratings reflect the steelmaker’s liquidity profile improvement, which was due to several actions taken by the company since early 2018. CSN managed to renegotiate debt of about BRL 14 billion ($3.55 million) with state-run banks Banco do Brasil (BB) and Caixa Economica Federal. The two creditors account for nearly 50 percent CSN’s debt.
CSN also issued $350 million (BRL 1.38 billion) in bonds in 2018, refinanced BRL 1 billion ($250 million) in debt due in 2019 with commercial bank Banco Santander and issued another BRL 1.95 billion ($490 million) in bonds due in 2023, as previously reported by SteelOrbis.
“CSN's B2 ratings reflect the company's position as a leading manufacturer of flat-rolled steel in Brazil, with a favorable product mix focused on value-added products,” Moody’s said.
“CSN is still contemplating additional liquidity events such as a roughly USD 1 billion (BRL 3.94 billion) iron ore stream deal. If concluded, the stream deal would support a material debt reduction and would support an additional improvement in the company's credit quality,” the credit rating agency said.
Moody’s said it expects liquidity for the local steelmaker to remain “adequate” to meet its debt obligations.
Moody’s also indicated it expects market conditions for local steelmakers in Brazil will “gradually recover, allowing CSN to direct cash flows from operations to reduce debt levels.”
USD = BRL 3.94 (April 29)