Fitch places TSUK debts in speculative grade
Global credit rating agency Fitch today assigned speculative grade rating to 3.67 billion pounds bank debts raised by the UK-based subsidiary of Tata Steel (TSUK) to acquire Corus Group.
By PTI |
NEW DELHI: Global credit rating agency Fitch today assigned speculative grade rating to 3.67 billion pounds bank debts raised by the UK-based subsidiary of Tata Steel (TSUK) to acquire Corus Group.
"Fitch has ... assigned a 'BB+' instrument rating to the 3.67 billion pounds senior secured bank facilities issued by TUSK and its subsidiaries to fund the acquisition of Corus Group," the credit rating agency said in a release.
The debts, which include 3.09 billion pounds of term loans, 500 million pounds of revolving credit facility and 80 million pounds of loan note guarantee facility, have been assigned 'BB+' rating indicating possibility of credit risk developing in future.
The long-term foreign currency Issuer Default Rating (IDR) of TSUK, which is the intermediate holding company of Corus, have been assigned 'BB' rating, indicating stable outlook but higher degree of credit risk.
Assigning the speculative grade to TUSK, Fitch said, “The expected strengthening of the group's business profile has been offset by a significant increase in post-acquisition debt levels."
Fitch said cyclical fluctuation of steel prices and increase in raw material cost, including that of iron ore, could have an adverse bearing on the performance on TUSK.
"Fitch has ... assigned a 'BB+' instrument rating to the 3.67 billion pounds senior secured bank facilities issued by TUSK and its subsidiaries to fund the acquisition of Corus Group," the credit rating agency said in a release.
The debts, which include 3.09 billion pounds of term loans, 500 million pounds of revolving credit facility and 80 million pounds of loan note guarantee facility, have been assigned 'BB+' rating indicating possibility of credit risk developing in future.
The long-term foreign currency Issuer Default Rating (IDR) of TSUK, which is the intermediate holding company of Corus, have been assigned 'BB' rating, indicating stable outlook but higher degree of credit risk.
Assigning the speculative grade to TUSK, Fitch said, “The expected strengthening of the group's business profile has been offset by a significant increase in post-acquisition debt levels."
Fitch said cyclical fluctuation of steel prices and increase in raw material cost, including that of iron ore, could have an adverse bearing on the performance on TUSK.
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