S&P puts ArcelorMittal rating on negative outlook
Steel giant ArcelorMittal risks having its credit ratings lowered to "junk" level after Standard and Poor's revised its outlook due to concerns the Luxembourg-based company won't be able to cut its debt.
"The outlook revision reflects our view that ArcelorMittal's leverage is currently above the levels we consider commensurate with the 'BBB-' rating, and that the probability of deleveraging in the near term has decreased given the uncertain macroeconomic environment," the ratings agency said in a statement.
The company had nearly $25 billion in debt at the end of September.
A "BBB-" rating is S&P's lowest investment grade rating, with bonds issued by companies with lower ratings considered as "speculative" or "junk".
S&P warned the company's finances would deteriorate if either Europe or the United States slip into a recession, adding it raised the company's financial risk profile to "significant" from "intermediate".
ArcelorMittal head Lakshmi Mittal said last week that the company expects to suffer pressure on prices and delivery in coming months, although second half earnings before interest, taxes, depreciation, and amortisation should still beat those posted in the same period last year.
© 2011 AFP