Moody’s gives Outokumpu CFR B3, notes B2

Moody's Investors Service said it assigned a B3 issuer corporate family rating and B3-PD probability default rating to Outokumpu Oyj.

Concurrently, the agency assigned B2 ratings to the €250 million senior secured fixed-rate notes due September 2019 issued by Outokumpu.

The outlook is positive.

"The B3 CFR reflects the company's high Moody's-adjusted leverage and the company being free cash flow negative at the end of 2015," Moody’s vice president, senior analyst Hubert Allemani said in a news release.

"However, we expect that Outokumpu will turnaround its financial performance achieving better cash flow protection metrics in 2016.

“We also note Outokumpu's leading market positions in both Europe and the U.S., as well as our expectations that the company will improve the profitability of its Coil Americas, while continuing the restructuring efforts throughout the group."

Moody's said it believes that Outokumpu's management has levers to pull to improve its profitability over the next two years while maintaining its financial flexibility.

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