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Reuters
S&P cuts AK Steel Holding Corp
Tuesday May 6, 11:14 am ET

(The following statement was released by the rating agency)

NEW YORK, May 6 - Standard & Poor's Ratings Services said today that it has lowered its corporate credit rating on integrated steel producer AK Steel Corp. (NYSE:AKS - News) and its parent, AK Steel Holding Corp. to 'BB-' from 'BB' and removed the ratings from CreditWatch with negative implications based on concerns regarding its legacy (pension and retiree medical benefits) costs.

Middleton, Ohio-based AK Steel has about $1.3 billion in total debt. The current outlook is negative.

"The rating actions reflect AK's weakening financial profile resulting from its substantial and growing legacy liabilities and concerns about the company's competitive position versus its main rivals who have shed significant legacy liabilities and obtained union agreements that provide labor cost savings," said Standard & Poor's credit analyst Paul Vastola.

Standard & Poor's said that its ratings on AK Steel reflect its challenged business position as a mid-size, value-added, integrated steelmaker, with high exposure to the automotive market, and burdensome legacy costs. AK Steel competes in cyclical, capital-intensive markets with a focus on the manufacture of flat-rolled carbon, stainless, and electrical steel. AK benefits from a higher value-added product mix than many of its peers, and has only minimal exposure to commodity-steel markets. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/. All ratings affected by this rating action can be found on Standard & Poor's public Web site at http://www.standardandpoors.com/; under Fixed Income in the left navigation bar, select Credit Ratings Actions.


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