Standard & Poor Promoted the Rating of Baosteel

Standard & Poore declared on 11th October that the long term credit rating of Baosteel Group and Baosteel Ltd. had been confirmed to be "A-" with "positive" outlook, a promotion from "stable" for the last year. This was another breakthrough of Baosteel following the historical highest rating "A-" in last December.

Standard & Poore thinks that the rating reflects Baosteel's leading position in Chinese iron & steel industry, represented in the production scale and market position in the breakdown market, the growing distributing capacity, the attention to top products, and the competitive advantages, etc. The excellent financial status is also a key factor supporting the rating.

Standard & Poore affirmed the capital advantage of Baosteel Group, which was considered to have strong mobility. This advantage not only represents the prudence of Baosteel's management in pursuing opportunity of growth but also provides strong financial support for fulfilling the strategic development objective for the future.

At the same time, Standard & Poore also pointed out the challenges Baosteel was facing, including such operating environment factors as rising raw material cost, intensified competition, and periodicity of the industry, as well as the influence of uncertainties in merging and recombination in the future.

The "positive" outlook reflects Standard & Poore's anticipation of Baosteel's future development, i.e. Baosteel's business and financial status will probably be further strengthened with the support of its strong financial resources, and especially the future success in merging and assets recombination will be helpful to promotion of the rating.

Standard & Poore is an international authoritative rating company, one of the 3 major global rating companies, in parallel with Moody's and Fitch. Their credit rating is accepted widely by international market investors. At the present time, 32 companies in total in main land China have gained credit rating from Standard & Poore; among them 6 companies including Baosteel Group and Baosteel Ltd. have gained "A-" and above but only Baosteel is from the manufacturing industry.

In recent years, Baosteel has been constantly promoting its degree of international operation. A good international credit rating, which is very important to overseas development, will provide strong support in financing with low cost in overseas capital market in the future, which is helpful to Baosteel in building up the image of being an excellent enterprise in the international market.