Moody’s Ratings has upgraded Tata Steel issuer rating to Baa2 from Baa3. The rating reflects expectation of extraordinary support from its parent Tata Sons in a stress scenario.
This is based on assessment of Tata Sons’ ability and willingness to support Tata Steel and aligns with revised cross-sector methodology that allows for entities to be rated above the sovereign after incorporating credit enhancement from a financially strong domestic parent, said Moody’s.
The stable outlook reflects our view that Tata Steel’s earnings will strengthen and credit metrics will stay appropriate for the current rating, as the company progresses on its growth plans.
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