Moody’s lowers U.S. Steel, notes

Moody's Investors Service said it downgraded United States Steel Corp.’s corporate family rating to B1 and its probability of default rating to B1-PD from Ba3 and Ba3-PD respectively.

At the same time, the agency downgraded the senior unsecured notes rating to B2 from B1, the industrial revenue bond ratings supported by U.S. Steel to B2 from B1 and the senior unsecured shelf rating to provisional B2 from provisional B1.

The speculative grade liquidity rating remains unchanged at SGL-2.

The outlook is negative. This concludes the review initiated on Oct. 8.

Moody’s said the downgrade reflects the deterioration in U.S. Steel's debt protection metrics and increasing leverage position as evidenced by its EBIT/interest coverage ratio and debt/EBITDA ratio of 1 time and 5.1 times for the 12 months ended Sept. 30.

Given the further downward movement in steel prices and industry capacity utilization rates subsequent to the third quarter, U.S. Steel's debt protection metrics are expected to weaken further for the fiscal year 2015 and the time horizon for recovery to be extended.

The company expects 2015 EBITDA to be roughly $225 million.

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