Fitch Ratings said Wednesday that it has downgraded United States Steel Corp.'s (X) ratings, reflecting lack of visibility into the strength of the recovery and the timing of U.S. Steel's return to profitability.
Fitch has downgraded Issuer Default Rating (IDR) to 'BB+' from 'BBB-', senior secured credit facility to 'BBB-' from 'BBB', and senior unsecured notes to 'BB+' from 'BBB-'.
However, the Rating Outlook is revised to Stable from Negative, as Fitch believes that U.S. Steel's liquidity is sufficient to support operations should the recovery remain weak for the next 12-18 months.
Fitch believes that free cash flow will be negative for 2010 and the ratings incorporate the possibility that the company will seek external financing in the near term for some portion of its capital spending over the next 24-36 months.
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