Moody's lowers Kremikovtzi

Moody's Investors Service said it downgraded the corporate family rating of Kremikovtzi AD to Caa3 from Caa1 and its €325 million senior secured guaranteed notes raised at Bulgaria Steel Finance BV to Caa3 (LGD4, 53) from Caa1 (LGD4, 55).

The outlook is developing.

The downgrade reflects continuous fundamental weakness of the business, weak liquidity and its main shareholder's plan to sell its stake, the agency said. The trustee also has served an acceleration notice on the €325 million senior secured guaranteed notes.

Given limited cash funds, the company's liquidity and debt service obligations were supported largely by the additional capital contributions made by the majority shareholder, Moody's noted.

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