International credit rating agency S&P Global Ratings (Standard & Poor's Ratings Services) has announced that it has revised its outlook on Turkey’s largest integrated steelmaker Erdemir Group to negative from stable and affirmed its 'BB' long-term corporate credit rating.
S&P stated that the outlook revision on Erdemir Group follows a similar action on Turkey. The sovereign outlook revision to negative from stable stemmed from what S&P considers to be rising constraints on policy makers' ability to tame inflationary and currency pressures, which could weaken the financial strength of Turkey's companies and banks, undermining growth and fiscal outcomes, during a period of rising global interest rates. According to the credit rating agency, this implies the potential for lower growth, which could eventually dampen steel demand in Turkey and adversely affect Erdemir Group. The negative outlook reflects the possibility of a downgrade over the next 12-18 months if Erdemir Group's business is materially affected by lower economic growth and steel demand.