Moody's lifts Kloeckner view to positive

Moody's Investors Service said it changed the outlook on Kloeckner & Co. International GmbH's Ba3 corporate family rating and Kloeckner Investment SCA's B2 global notes to positive and reassigned the corporate family rating at Kloeckner & Co. AG following a reorganization of the group.

The change in the outlook reflects the improved capital structure of the group supported by its recent initial public offering, conversion of shareholders loans and prepayment of 35% of its notes, the agency said. It also reflects good prospects for further reduction in leverage in the next 12 months supported by strong operating performance in 2006 and several successful disposals.

Moody's said Kloeckner's performance continues to be robust, supported by favorable steel market environment allowing strong growth in volumes and prices. While Kloeckner's free cash generation remains modest compared to the absolute level of debt, it benefits from the countercyclical nature of working capital requirements that decline in a weaker pricing environment.

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