TaTa Steel's UK venture at negative ratings

Moody's today downgraded the rating of Tata Steel UK Holdings Ltd by one notch stating the operating environment of the European steel industry can be weak further in the coming months.

Tata Steel has now been given B3 rating by the rating agency, which said in a statement that the steel maker's debt coverage metrics are no longer consistent with its previous rating B2.

B3 rating implies that adverse business and economic conditions are likely to impair a company's capacity in meeting its financial commitments.

However, the global rating agency has kept the outlook of Tata Steel's UK venture unchanged at negative.

Besides, it has also lowered the outlook for Tata Steel India to negative from stable and downgraded the UK operation's 3.4 billion euro term loan facility and 690 million euro revolving credit facility to B3 from B2.

Ratings for both, Indian and UK operations of Tata Steel, are unlikely to go up in the near future, but could return to a stable outlook depending upon the industry environment, Moody's said.