S&P turns Tata Steel view to positive

S&P said it turned the outlooks for Tata Steel Ltd. and its subsidiary ABJA Investment Co. Pte. Ltd. to positive from stable and affirmed the BBB- long-term issuer credit ratings on the two companies and the BBB- rating on the senior unsecured notes issued by ABJA.

“Tata Steel's strong free operating cash flows over the next two years will strengthen its credit profile. We estimate the company will generate $3 billion-$4 billion of free operating cash flows annually over the next two years, given continued strength in steel prices. This is based on our estimate of EBITDA/ton for the Indian operations averaging about Indian rupee (Rs.) 20,000 over the next two years. This is about 40% higher than typical levels in the past,” S&P said in a press release.

The new outlook indicates a possibly higher rating if over the next 12-24 months Tata Steel continues to lower leverage and improve its resilience to steel price cycles.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.