Depressed scrap prices in the last two months of 2012, along with low availability of scrap, caused ALBA's EBITDA to fall below our base-case forecast. We do not expect ALBA's key ratios to deteriorate beyond our guidelines for current rating level, but we calculate that the covenant headroom under the group senior facility agreement will be minimal and lower than we previously expected. We are therefore affirming our 'BB-' long-term rating on ALBA Group, but revising downward our assessment of liquidity to "less than adequate" from "adequate," as our criteria define these terms. The stable outlook reflects our view that despite difficult trading conditions we expect the group to continue to deleverage over the next 12 months as it uses
