ArcelorMittal Issues Notes Worth EUR900M Under EMTN

Zacks

ArcelorMittal MT has completed the issuance of €400 million (roughly $425 million) Floating Rate Notes due Apr 9, 2018, and €500 million (around $531 million) 3.00% Notes due Apr 9, 2021. These notes were issued under the company’s €6 billion (roughly $6.4 billion) wholesale Euro Medium Term Notes (“EMTN”) Program.

ArcelorMittal said that the proceeds of the issuance will be used for general corporate purposes.

ArcelorMittal posted a loss in the fourth quarter of 2014 as reduced iron-ore pricing weighed on its mining segment and it saw lower steel selling prices. Weak demand from China, a key market, continued to hurt iron ore prices in the quarter.

Revenues fell in the reported quarter as a decline in average steel selling prices, drop in marketable iron ore shipments and reduced iron ore reference prices more than offset improved steel shipments.

ArcelorMittal expects earnings before interest, taxes, depreciation and amortization (EBITDA) in be in the range of $6.5 billion to $7 billion for 2015, a decline from $7.2 billion in 2014. Lower iron ore pricing is expected to continue to weigh on its mining business and affect its profits this year.

ArcelorMittal continues to contend with soft economic conditions in Europe, volatility in steel prices and tough competition. The oversupply in the steel industry has pressured prices and might lead to further price declines. Moreover, lower iron ore pricing is expected to continue to hurt the company’s mining business in 2015.

ArcelorMittal currently carries a Zacks Rank #4 (Sell).

Better-ranked companies in the steel space include ThyssenKrupp AG TYEKF, Commercial Metals Company CMC and LB Foster Co. FSTR. While ThyssenKrupp sports a Zacks Rank #1 (Strong Buy), Commercial Metals and LB Foster carry a Zacks Rank #2 (Buy).

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