(Bloomberg) -- Tata Steel Ltd.’s dollar bonds climbed by the most in 18 months after S&P Global Ratings returned the company to investment-grade status after 14 years.
The ratings firm lifted Tata Steel’s credit score for a third-consecutive time this year on Thursday. S&P raised the Mumbai-based steelmaker’s rating two levels to BBB- from BB, citing its expectation that Tata Steel’s largest shareholder Tata Sons will likely provide extraordinary financial support if required in times of financial stress.
Tata Steel’s dollar bond maturing in 2028 surged 2.1 cents on the dollar to 110.3 cents, its biggest jump since April last year, as of 2.44 p.m. in Hong Kong, Bloomberg-compiled prices show.
Steel producers globally are benefiting from higher commodity prices amid a rebound in the global economy from the Covid-19 pandemic. Tata Steel, which has one of the most integrated production operations in India with access to its own iron ore resources, is also profiting from moves by some other countries including China to curtail steel-related exports.
S&P said it also expects “that Tata Steel will continue deleveraging to improve its resilience to downturns over the next 12-18 months.”
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