Standard & Poor’s raises AK Steel rating to “BB” on expected growing demand for steel

S&P raises AK Steel rating

NEW YORK — Ratings agency Standard & Poor’s upgraded AK Steel on Tuesday, saying that it expects its performance to improve this year on higher demand for steel.

S&P raised AK Steel credit rating to ‘BB’ from ‘BB-’ and removed the company from its CreditWatch list. The newer rating would apply to AK Steel’s proposed issuance of $400 million of senior unsecured note that would be due in 2020.

S&P credit analyst Marie Shmaruk said that the upgrade is based on expectations of growing steel demand, especially for the type of flat rolled steel the company produces. Much of that steel is used by the auto industry.

AK Steel reported a first-quarter profit earlier this month on higher sales that offset sinking prices for steel. But it also warned that higher prices of iron ore would hurt its second-quarter results.

Steel makers suffered during the recession as activity dropped sharply in construction, autos, aircraft and other major industries.

Shares of AK Steel Holding Corp. fell sharply in midday trading, down $1.42, or 7.5 percent, to $17.57, part of a broader market sell-off.