Moodys lowers Tata Steel rating

Moodys Investors Service on Monday cut the rating of Tata Steel Ltd,the worlds sixth largest steel manufacturer by one notch to Ba3 from Ba2,citing a weak outlook for the steel industry. The rating action reflects the anticipated weakening of Tata Steels consolidated financial profile over the intermediate term,driven by the weakness in the steel markets,and the significant operating challenges faced by the companys European operations, said Ivan Palacios,a Moody8217;s AVP/Analyst. Tata Steel shares on Monday slipped 10.21 to close at Rs 416.55 on the Bombay Stock Exchange.

Moodys has a stable outlook on Tata Steel. Following the renegotiation of the covenants and contribution of additional funding to Tata Steel UK,Tata Steels position is likely to have stabilised in the near term,with an expectation of progressive improvement in Tata Steels consolidated financial profile beyond year-end March 2010, the rating agency said.