S&P Global Ratings on Wednesday said it had lowered its ratings outlook on Tata Steel as the agency did not foresee improvement in the steel maker’s earnings and financial profile over the next 12-18 months.
The outlook reflects the risks of further weakening in Tata Steel’s credit profile if the effect of economic conditions and lower commodity prices are more prolonged than our current expectations, S&P Global said in a statement.
The agency lowered its long-term foreign currency issuer credit rating on Tata Steel and subsidiary ABJA Investment Co Pte Ltd and the issue rating on various dollar-denominated senior unsecured notes ABJA has issued to B+ from BB-.
“The downgrade mainly reflects our expectation that the improvement in Tata Steel’s earnings and financial profile, on which the BB- rating was based, is unlikely to materialise in the next 12-18 months. This is mainly due to Covid-19 related disruptions and the consequent economic effects,” it said.