13.11.2012 20:05
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AK Steel Corporation -- Moody's downgrades AK Steel's Ratings, (CFR to B2); rates new instruments; outlook negative

Approximately $1.4 billion of debt affected

New York, November 13, 2012 -- Moody's Investors Service downgraded the corporate family and probability of default ratings of AK Steel Corporation (AK Steel) to B2 from B1 and downgraded the senior unsecured notes and revenue funding bonds to B3 from B2. At the same time, Moody's assigned a B1 rating to the $350 million in senior secured notes due 2018 and a B3 rating to the $125 million exchangeable notes due 2019. The speculative grade liquidity rating remains unchanged at SGL-3. The outlook is negative. This concludes the review for downgrade initiated on September 21, 2012.

RATINGS RATIONALE

The downgrade of the corporate family rating to B2 reflects AK Steel's tightening and weak debt protection metrics and increasing leverage position as challenging conditions in the steel industry continue to compress earnings and cash flow generation. Given the relatively static demand levels, downward trend evidenced in industry capacity utilization levels, and pressure on pricing, we do not expect the company's performance to evidence the level of improvement necessary to be consistent with a B1 corporate family rating over the next eighteen months. Pro forma for the new debt issuance and repayment of outstandings under the asset back revolver we estimate leverage, as measured by the debt/EBITDA ratio to be around 13x. Interest coverage is expected to continue negative to breakeven over the next several quarters.

The B2 corporate family rating considers AK Steel's position as a mid tier steel producer with shipments of approximately 5.4 million tons for the twelve months to September 30, 2012. The company's business mix including a meaningful level of value added products, including coated, electrical and stainless products, as well as its strong contract position are supporting factors in the rating. The rating also captures our expectation that the company's cost position challenges will ease somewhat over the next several quarters given the declines that have been seen in iron ore and coking coal prices, although this improvement is unlikely to make a material change given continued price challenges. The improved liquidity from the debt and equity issues also supports the rating.

However, the company's ability to generate meaningful earnings and cash flow will remain vulnerable to the current level of economic uncertainty surrounding growth rates in the US and China as well as the European sovereign debt crisis and poor economic conditions in Europe. Although AK Steel's business is more exposed to the flat rolled market and not the long products market, we believe the overall industry will continue to face a difficult recovery as long as the important commercial construction market is unable to evidence a good recovery off an extremely depressed level.

The negative outlook reflects our view that industry risks continue to the downside. Should hot rolled prices and utilization levels fall much below current run rates or appear sustainable at only about $600/ton and 70% respectively, the company's financial profile would deteriorate further.

Given the company's weak metrics and our expectations for industry conditions in 2013 to not be materially different from 2012, a rating upgrade is unlikely over the next twelve to eighteen months. Should conditions show some level of sustainable improvement and improving trends, the outlook could be stabilized. The rating could be downgraded should the company's liquidity position deteriorate materially due to ongoing losses and cash burn, EBIT margins not evidence an improving trend to at least 2.5%, EBIT/interest of at least 2x and debt/EBITDA of no greater than 10x.

The principal methodology used in rating AK Steel was the Global Steel Industry Methodology published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Headquartered in West Chester, Ohio AK Steel is a middle tier, integrated steel company producing flat-rolled carbon steels. Revenues for the twelve months through September 30, 2012 were $6.0 billion.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following : parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Carol Cowan VP - Senior Credit Officer Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Brian Oak MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."

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This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.

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Analysen zu AK Steel Holding Corp.

  • Alle
  • Buy
  • Hold
  • Sell
  • ?
28.01.2013AK Steel verkaufenGoldman Sachs Group Inc.
21.11.2012AK Steel neutralGoldman Sachs Group Inc.
25.10.2012AK Steel neutralNomura
07.09.2012AK Steel holdDeutsche Bank Securities
28.08.2012AK Steel sellUBS AG
13.06.2012AK Steel overweightBarclays Capital
26.04.2012AK Steel overweightBarclays Capital
19.03.2012AK Steel overweightBarclays Capital
26.01.2012AK Steel overweightBarclays Capital
12.06.2009AK Steel buyMerriman Curhan Ford & Co
21.11.2012AK Steel neutralGoldman Sachs Group Inc.
25.10.2012AK Steel neutralNomura
07.09.2012AK Steel holdDeutsche Bank Securities
10.07.2012AK Steel neutralUBS AG
19.06.2012AK Steel neutralUBS AG
28.01.2013AK Steel verkaufenGoldman Sachs Group Inc.
28.08.2012AK Steel sellUBS AG
12.01.2011AK Steel sellUBS AG
16.11.2006Update AK Steel Holding Corp.: SellLongbow
18.05.2006Update AK Steel Holding Corp.: SellMatrix Research
Um die Übersicht zu verbessern, haben Sie die Möglichkeit, die Analysen für AK Steel Holding Corp. nach folgenden Kriterien zu filtern.

Alle: Alle Empfehlungen
Buy: Kaufempfehlungen wie z.B. "kaufen" oder "buy"
Hold: Halten-Empfehlungen wie z.B. "halten" oder "neutral"
Sell: Verkaufsempfehlungn wie z.B. "verkaufen" oder "reduce"

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