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(Current Affairs For SSC Exams) Economic Issues, Jan. 2013 - Moody’s Downgrades
Economic Issues
January 2013
Topic : Moody’s downgrades Arcelor Mittal rating to speculative
Moody’s, on Tuesday, downgraded Arcelor Mittal’s long-term credit rating by one notch to Ba1, putting it into speculative or ‘junk’ territory, saying the deterioration in steel markets means the company can no longer reduce its debt enough to keep an investment grade mark. “The downgrade reflects the deterioration in global steel markets over the last six months,’’ said Moody’s, pointing to the company posting its worst performance in three years last quarter.
Arcelor Mittal, the world’s top steelmaker, had an operating loss and its gross debt rose in the third quarter.
“As a result, the amount of debt reduction the company must realise in order to hold a Baa3 rating is so large as to be unachievable...’’ said Steve Oman, Senior Vice-President and lead analyst for the EMEA steel industry at Moody’s. The Baa3 rating is the lowest investment-grade rating at Moody’s.
