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Bond Market News
Cleveland-Cliffs Downgraded to B+ by Fitch
March 26, 2026
Cleveland-Cliffs was downgraded by a notch to B+ from BB- by Fitch. The downgrade stems from a heavy debt burden and limited near-term deleveraging prospects. Cliffs added ~$2.5bn in debt to acquire Stelco and raised an additional $1.3bn net to fund operations, resulting in ~$200mn more in annual cash interest compared to 2024. US tariffs on Canadian steel exports have sharply curtailed Stelco’s volumes and likely pushed Stelco into loss-making territory in 2025, though Cliffs expects a positive contribution in 2026. Fitch expects Cliffs’ EBITDA leverage to remain above 4x through 2029. Free cash flow is expected to be essentially flat in both 2026 and 2027. Profitability was also cited a concern, with EBITDA margins expected to stay below 8%, with a projected EBITDA of ~$1.4bn in 2026. On the positive side, Cliffs retains a strong competitive position as the largest steel supplier to the US automotive sector.
Its 6.875% 2029s traded stable at 100.5, yielding 6.7%.
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