ArcelorMittal

The stable outlook reflects ArcelorMittal's ability to maintain ample rating headroom through the cycle and accommodate business growth, supported by its financial policy. Under our base-case scenario, we expect ArcelorMittal to post adjusted EBITDA of $20 billion-$22 billion in 2021, equivalent to underlying EBITDA of $18 billion-$20 billion. This translates into positive FOCF and adjusted FFO to debt of more than 100%. We continue to view adjusted FFO to debt of comfortably above 25% during normal market conditions, and about 25% at the bottom of the cycle, as commensurate with the 'BBB-' rating. With the currently strong steel and iron ore markets, we view a negative rating action as remote. However, a downgrade could occur if: We revise down our

...S&P Global Ratings expects the very supportive market environment to result in a marked improvement in ArcelorMittal's credit metrics. Strong demand across end markets and geographies will make 2021 the best year for the company's financial results since 2008. The rollout of fiscal stimulus programs, including for infrastructure investments and the low-carbon transition, as well as supportive regulations such as controls on steel production in China and exports, support the growth in demand. During the first half of 2021, steel companies ran their facilities at full capacity, and order books for the rest of the year look promising. We forecast that ArcelorMittal's funds from operations (FFO) to debt will be more than 100% in 2021--ample headroom under our FFO-to-debt expectation of 25% (during normal market conditions) for the current rating. The current financial policy supports the '###-' rating. According to ArcelorMittal's financial policy, it can use up to 50% of its free cash flows...

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