S&P ups TMS loan, notes

S&P said it affirmed its B+ corporate credit rating on TMS International Corp. and revised the outlook to stable from negative.

In addition, the agency raised its rating on the company's senior secured term loan due 2020 to BB- from B+ and its rating on the senior unsecured notes due 2021 to B from B-. The recovery rating on the term loan was revised to 2 from 3, which indicates an expectation for substantial (70% to 90%; at the lower end of the range) recovery in the event of a payment default. The recovery rating on the unsecured notes was revised to 5 from 6, which indicates an expectation for modest (10% to 30%; at the lower end of the range) recovery in the event of a payment default.

"The stable outlook reflects our view that global steel markets appear to have stabilized and rebounded in recent months, resulting in what we view to be improving credit metrics for TMS over the next 12 months," S&P analyst Michael Maggi said in a news release.

For the full year 2016, S&P Global Ratings expects TMS' adjusted debt to EBITDA to be about 6 times, falling to about 5.5 times by the end of 2017, while its FFO/debt should remain between 10% and 12% over the same time period.

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