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In a development that will help Tata Steel raise overseas debt at lower rates, the company's credit rating has been upgraded by Standard and Poor's (S&P).
In a statement, S&P said, the steel maker's long-term corporate credit rating has been raised to ‘BB' from ‘BB-' on de-leveraging measures and better operating performance.
“The outlook is stable. We also raised the issue rating on the company's senior unsecured notes to ‘BB' from ‘BB-'. At the same time, we affirmed our ‘B+' long-term corporate credit rating and ‘B' short-term rating on Tata Steel UK,” S&P said.
Tata Steel's rating has been raised because the agency expects it to sustain the significant improvement in its cash flow protection measures in the fiscal ending March 31, 2012.
“We anticipate that Tata Steel's cash flows will further improve in fiscal 2013 due to the commissioning of brownfield expansion,” said Standard & Poor's credit analyst Mr Mehul Sukkawala. “We revised our view of the company's financial risk profile to ‘significant' from ‘aggressive' due to its de-leveraging measures and higher cash flows.”
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