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Bond Market News
CSN Upgraded to BB from B+
June 30, 2021
Brazilian Companhia Siderúrgica Nacional (CSN) has been upgraded two-notches to BB from B+ by S&P based on sizable deleveraging. The rating agency has also upgraded its issue-level rating on CSN Islands XII Corp.’s senior unsecured notes to BB from B+. The outlook for CSN on the global scale rating remains positive, but the outlook on the national scale rating has been revised to stable. The rating agency forecasts adjusted EBITDA to rise to about BRL 25bn ($5bn) in 2021 from BRL 10bn ($2bn) in 2020. The rating action reflects the favorable outlook of the steel sector due to the recent surge in iron ore prices and strong domestic steel demand. CSN has also been structurally strengthening its liquidity through asset sales, nominal debt and interest reduction, and debt refinancing to extend debt maturities and improve capital structure. The positive global scale rating outlook also reflects S&P’s prediction that CSN will have low leverage in the next 18-24 months and cites a possible future upgrade if its adjusted debt to EBITDA remains below 1.5x and ongoing debt refinancing continues.
CSN´s USD bonds were up with its 4.625% 2031s up 0.53 to 101.125, yielding 4.48%.
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