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Related Issuers
Rating Action:

Moody's assigns (P)Ba2 rating to proposed hybrid security of ArcelorMittal; Baa3 sr.unsec'd rating, negative outlook

Global Credit Research - 24 Sep 2012

London, 24 September 2012 -- Moody's Investors Service has today assigned a provisional (P)Ba2 long-term rating to the proposed issuance of Subordinated Perpetual Capital Securities (the "Hybrid") by ArcelorMittal S.A. The outlook is negative, in line with that of ArcelorMittal's Baa3 senior unsecured issuer rating. The size and completion of the Hybrid remain subject to market conditions.

RATINGS RATIONALE

The rating of (P)Ba2 is two notches below ArcelorMittal's senior unsecured rating of Baa3, reflecting the features of the Hybrid. The instrument is undated, very deeply subordinated and ArcelorMittal can opt to defer coupons on a cumulative basis.

Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavour to assign a definitive rating to the Hybrid. A definitive rating may differ from a provisional rating.

As the Hybrid rating is positioned relative to another rating of ArcelorMittal, a change in either (i) Moody's relative notching practice or (ii) the Baa3 senior unsecured rating of ArcelorMittal, which carries a negative outlook, could affect the Hybrid rating. The guidance given in the Announcement published on 2 August 2012 still applies.

PRINCIPAL METHODOLOGY

The principal methodology used in rating ArcelorMittal S.A. was the Global Steel Industry Methodology published in January 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

ArcelorMittal is the world's largest steel company. It operates approximately 65 integrated and minimill steel-making facilities in over 20 countries, which have a production capacity of around 125 million tonnes of crude steel per year. The company also has sizable captive supplies of iron ore and coal and a trading and distribution network. Over the last 12 months, the company shipped 86 million tonnes of steel and had sales of $92 billion.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare the rating are the following : parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entity or its related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Steven P Oman
Senior Vice President
Corporate Finance Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Olivier Beroud
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's assigns (P)Ba2 rating to proposed hybrid security of ArcelorMittal; Baa3 sr.unsec'd rating, negative outlook
No Related Data.

 

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