Credit rating agency Standard & Poor's (S&P) has upgraded the the global scale ratings of Brazilian steelmaker Companhia Siderurgica Nacional (CSN) to CCC+ from CCC.
The company’s national scale ratings were raised as well to brB from brCCC. The outlook was changed to positive.
“The upgrade reflects the successful negotiations to refinance a large portion of the company's debts, including BRL 6.5 billion that matures in the next three years, reducing short-term liquidity pressures,” S&P noted.
S&P said a series of factors “underpin” its view of the steelmaker’s “cash flow relief,” including the extended debt amortization profile, lower interest expense due to the sharp decline of the base interest in Brazil in 2017, and the “absence” of covenant breach risk following the presentation of the 2016 financial statements in late 2017.
“Nonetheless, the CCC+ ratings continue to reflect the significant amount of debt coming due in 2019 and 2020, especially the $750 million and $1.2 billion senior unsecured notes, which requires the company to rely on favorable external conditions such as better prices and volumes and on ongoing refinancing needs for the sustainability of its capital structure in the intermediate term,” the ratings agency said.