Fitch Upgrades US Steel's IDR & Outlook
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Fitch Upgrades US Steel's IDR & Outlook

Fitch Ratings has upgraded United States Steel Corporation's Long-Term Issuer Default Rating to 'B' from 'B-'. The Rating Outlook has been revised to Positive

Fitch Ratings has upgraded United States Steel Corporation's Long-Term Issuer Default Rating to 'B' from 'B-'. The Rating Outlook has been revised to Positive from Stable. Fitch has also upgraded the ABL credit facility to 'BB'/'RR1' from 'BB-'/'RR1' and upgraded the senior unsecured notes and environmental revenue bonds to 'B'/'RR4' from 'CCC+'/'RR5'. Fitch Ratings said “The upgrade reflects the faster than anticipated economic recovery following the pandemic's impact on the economy in 2020, leading to significantly improved domestic steel market conditions and expected EBITDA generation. The ratings also reflect US Steel's acquisition of the remaining interest in Big River Steel Holdings LLC in 1Q21, which is expected to lower the company's overall cost position.”

Fitch Ratings said “The Positive Outlook reflects Fitch's expectation that total debt/EBITDA will be significantly lower in 2021 compared with 2020 and for the company to use excess cash to prioritize debt repayment in the near-term leading to total debt/EBITDA sustained below 4.0x. The Positive Outlook also reflects solid domestic steel market conditions, including historically high prices and solid demand, which should lead to the generation of significant cash resulting in meaningful deleveraging capacity.”

Fitch Ratings added “The two-notch upgrade of the unsecured notes reflects US Steel repaying USD 1.056 billion of secured notes in 1Q21 leading to a better recovery of the unsecured notes in the recovery waterfall.”

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