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Bond Market News
CSN Downgraded to B by S&P; Dollar Bonds Drop by 2-3 Points
March 19, 2026
Companhia Siderúrgica Nacional (CSN) was downgraded by a notch to B from B+ by S&P. The downgrade reflects a convergence of operational and financial pressures. On the business front, the steel sector continues to face weak demand amid high interest rates. CSN’s mining profitability has been hurt by rising freight costs, while cement growth is slower than expected. These factors constrain S&P’s 2026 EBITDA forecast for the company at BRL 10.5bn ($2bn), below its prior estimate of BRL 11.7bn ($2.2bn). With BRL 5.1bn ($1bn) in interest payments and BRL 6.2bn ($1.2bn) in expected capex this year, CSN faces a free cash flow deficit of BRL 410mn ($78mn). As of December 2025, CSN carried BRL 53bn ($10.1bn) in adjusted debt, with BRL 18bn ($3.4bn) maturing over the next two years. S&P projects leverage to remain elevated at 5–6x. CSN’s primary deleveraging strategy hinges on asset sales, including its cement business and a stake in CSN Infraestrutura. However, even a successful cement sale may not bring leverage below 5x, they noted. A new collateral-backed loan is also being explored to ease near-term liquidity pressure, but execution risks remain high.
CSN’s dollar bonds dropped by 2-3 points across the curve, with its 5.875% 2032s down at 65.7, yielding 14.6%.
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