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ArcelorMittal Said to Seek to Reduce $10 Billion of Credit Lines

Nov. 11 (Bloomberg) -- ArcelorMittal, the world’s biggest steelmaker, is in talks with lenders to reduce its credit lines as it seeks to lower its debt, according to three people with knowledge of the negotiations.

ArcelorMittal is seeking to cut two financing pacts to $6 billion from $10 billion, said the people, who asked not to be identified as the talks are private. The company’s $4 billion and $6 billion loan arrangements will be reduced on a pro-rata basis.

The steelmaker, which has $17.8 billion of debt, is seeking to reduce its borrowings to $15 billion after its credit rating was cut to junk last year. The revolving credit facilities, where money repaid can be borrowed again, aren’t used by the Luxembourg-based company, according to third-quarter results published Nov. 7.

A company spokeswoman, who asked not to be named citing company policy, declined to comment on the financing.

ArcelorMittal also asked its banks to relax covenants on both of the credit lines as well as to extend the $4 billion facility to the fourth quarter of 2016, the people said.

JPMorgan & Co. analysts Dave Katz and Nitin Dias wrote in a Nov. 8 report that ArcelorMittal could regain its investment-grade rating by the end of 2015 or early 2016 as its earnings improve and cost-saving initiatives are completed.

The company is currently graded Ba1 by Moody’s Investors Service, and BB+ by Standard & Poor’s and Fitch Ratings, data compiled by Bloomberg show.

To contact the reporters on this story: Stephen Morris in London at smorris39@bloomberg.net; Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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