By Alex MacDonald
LONDON--Steel giant ArcelorMittal (MT) remains committed to
maintaining its investment grade credit rating--despite the
relatively low cost incurred from a one notch downgrade--because it
views the credit rating as important in its role as a consolidator
of the industry, the company's chief financial officer said
Wednesday.
In order to "continue consolidating...the appropriate rating for
our investment size is investment grade," Aditya Mittal told
analysts in a conference call.
ArcelorMittal has been seeking to reduce its debt in order to
maintain its investment grade credit rating after Standard and
Poor's said the company must reduce its adjusted debt, a metric
that includes liabilities that aren't often apparent on the balance
sheet, by about $11 billion to $30 billion in order to maintain its
BBB-/A-3 long- and short-term corporate credit rating.
So far the company has reduced its adjusted debt by $4 billion,
Mittal said.
He noted that the company remains committed to its investment
grade even though the consequence of a one notch credit downgrade
is equivalent to an additional $100 million in interest
expenses.
The company has reduced its adjusted debt through a combination
of non-core asset sales and changes to pension plans as evidenced
in the case of a change in the employee benefit plans for its
Dofasco operations in Canada.
-Write to Alex MacDonald at alex.macdonald@dowjones.com
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