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US Steel Upgraded to BBB After Nippon Steel Acquisition
June 23, 2025
US Steel has been upgraded by two notches to BBB from BB by Fitch, after Nippon Steel Corporation (NSC) completed its $14.1bn acquisition of the US steel maker. The $11bn investment commitment from Nippon and access to NSC’s technology and IP are expected to improve US Steel’s operating profile, margins and cost position. NSC currently produces 69mn tonnes of steel, almost 3x the 25.4mn ton production of US Steel. Fitch anticipates the company’s focus on lower-cost and capital-light assets to reduce earnings volatility. Fitch expects EBITDA leverage to fall from 4.1x as of March 2025 to 2.5x on average from 4Q25 to 4Q27. Standalone EBITDA is expected to average between $1.5-2.0bn annually, and its $349mn convertible notes are expected to be repaid shortly after the deal closure.
US Steel’s 6.65% 2037s have rallied by 4.3 points over the last 30 days, currently trading at 104.25, yielding 6.14%.
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