AK Steel Cuts 2013 Pension Funds on New Transport Law
AK Steel Holding Corp., a producer of the alloy that Standard & Poor’s downgraded last month, will cut its estimated 2013 pension expense by one-third, or $100 million, after passage of a transportation bill extension lowered some required contributions.
AK Steel will pay $200 million into its pension fund in 2013 after the Surface Transportation Extension Act of 2012 was signed into law on July 6, the West Chester, Ohio-based company said today in a filing with the Securities & Exchange Commission. The bill stabilizes the minimum annual contributions to fund defined-benefit pension plans, while raising premiums paid to the Pension Benefit Guaranty Corp., AK said.
Standard & Poor’s Ratings Services downgraded AK Steel’s credit rating to B+, or four levels below investment grade, on June 29. “Weak” results at AK won’t recover in the next several quarters because of the steelmaker’s high fixed costs and lower prices than expected for the metal, the ratings company said.
AK Steel was unchanged at $6.14 at 10:14 a.m. in New York. The company raised its price for its flat steel products by $40 a ton on July 6.
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