RATINGS agency Standard and Poor’s said on Friday (June 5) it had lowered its long-term debt rating on ArcelorMittal, the world’s largest steel maker, from BBB-plus to BBB – two notches above junk status – because of problems affecting the steel sector as a whole.
Short-term debt ratings were downgraded from A-2 to A-3. The agency’s outlook on ArcelorMittal was negative.
S and P said it expected ArcelorMittal to record “materially weaker” results this year as the steel industry suffers “a broad and severe weakening of its operating performance,” notably reduced capacity along with lower shipments and prices.
“Market conditions appear to be stabilising but are likely to remain weak,” S and P said.
It described the company’s cost-cutting and spending reductions and other measures as “not sufficient” to stem the effects of the global economic downturn.
