Essar Steel Algoma Inc. (DIP) -- Moody's assigns B2 rating to Essar's DIP revolver and term loan

New York, December 29, 2015 -- Moody's Investors Service assigned a B2 rating to the $25 million revolving debtor-in-possession credit facility ("DIP revolver") and the $175 million debtor-in-possession term loan ("DIP term loan"), collectively, the "DIP facilities", of Essar Steel Algoma (DIP) (Essar). The rating primarily reflects the collateral coverage available to the DIP lenders under the ABL and term loan and the structural features of the DIP facilities. The facilities are secured by substantially all assets of the company with some reliance on its fixed assets and include a super priority claim under the Canada Bankruptcy Code. The bankruptcy court approved the execution of the DIP facilities in its final debtor-in-possession order on November 9, 2015. The ratings also consider the size of the DIP facilities as a percentage of pre-petition debt and the nature of the bankruptcy and reorganization.

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