Credit rating agency Moody’s said this week it has upgraded the corporate family ratings of flats steelmaker Usiminas to B2 from Caa1 on a global scale and to Ba1.br from B3.br on a national scale. Moody’s said the company’s ratings outlook is stable.
Moody’s said the upgrade primarily reflects the “conclusion of its debt renegotiation process with the amortization of the 2018 bonds issued by Usiminas Commercial Ltd., which has removed liquidity pressures and allows the company to further focus on its operations.”
The agency said the improved ratings also reflect the expectation the steelmaker’s credit metrics will “gradually improve.”
The slow, yet gradual recovery of the nation’s steel industry and the assumption Usiminas will generate positive free cash flows in the “coming years” have also supported Moody’s expectations on the producer’s improved credit metrics.
Moody’s said the stable outlook incorporates its expectations that Usiminas liquidity will remain “adequate to service its debt obligations and that market conditions for flat steel producers in Brazil will gradually recover, allowing Usiminas to direct cash flows from operations to reduce debt levels.”