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CSN Downgraded to Caa1 by Moody’s
May 19, 2026
Companhia Siderurgica Nacional (CSN) was downgraded by two notches to Caa1 from B2 by Moody’s. The downgrade reflects persistent credit weakness, elevated liquidity risks, and the potential for distressed debt exchanges. While CSN secured a $1.2bn bridge loan in April 2026, concerns remain regarding ongoing cash burn, high refinancing needs, and uncertainty over the timing of planned asset sales. CSN announced in January 2026 its intention to sell a minority stake in infrastructure assets and a majority stake in cement assets, targeting BRL 15–18bn ($3-3.6bn) in proceeds to reduce debt, ease upcoming maturities, and rebalance capital allocation across the group. However, until those sales are executed, credit metrics are expected to remain weak. Leverage is projected to stay in the 5.5–6.5x range over the next 12–18 months. However, liquidity pressure remains a key concern. CSN held BRL 13.4bn ($2.7bn) in consolidated cash as of March 2026, though BRL 8.8bn ($1.8bn) of that sits at the mining subsidiary. Including the bridge loan proceeds, available liquidity rises to ~BRL 18.6bn ($3.7bn), short of the BRL 28.6bn ($5.7bn) in debt maturing through 2028. With free cash flow expected to remain negative given ongoing capex plans and dividend distributions, the company faces a financing gap. Besides, with most debt at the holding level while cash generation is concentrated in the mining subsidiary, the group’s risk profile is further complicated. CSN has already been downgraded by S&P from BB- to B and by Fitch from BB to B since the start of this year.
CSN’s dollar bonds traded marginally lower. For instance, its 5.875% 2032s were down 0.1 points to 65.8, yielding 14.8%.
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