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Moody's announces completion of a periodic review of ratings of Tata Steel UK Holdings Limited

Steel News - Published on Mon, 15 Apr 2019

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Moody's Investors Service has completed a periodic review of the ratings of Tata Steel UK Holdings Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

Tata Steel UK Holdings Limited's B2 corporate family rating (CFR) reflects the company's (1) large and diversified manufacturing operations across the UK and the Netherlands; and (2) sustained improvement in profitability and the resultant improving credit metrics.

The CFR also incorporates a two-notch uplift reflecting our expectation of ongoing distress support from its sole shareholder, Tata Steel Ltd. (Ba2 stable). Such support has been provided in the form of working capital and liquidity support and remains key to TSUKH's operations. Counterbalancing these strengths, the rating also incorporates TSUKH's (1) exposure to the cyclical steel industry and challenging conditions in key operating markets; (2) volatile profitability; and its (3) weak, albeit improving, financial profile.

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Posted By : Rabi Wangkhem on Mon, 15 Apr 2019
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