Staff report

Vallourec, a worldwide producer of seamless tubular solutions, announced last week it received credit rating upgrades from Moody’s and S&P Global.

The announcement follows Fitch’s upgrade to investment grade in April. Vallourec multinational operations include a mill in Youngstown.

Moody’s upgraded Vallourec’s issuer rating from Ba1 to Baa3, an investment grade rating with a stable outlook. S&P Global upgraded Vallourec’s long- and short-term issuer credit ratings from BB+/B to BBB-/A-3, investment grade ratings, with a stable outlook.

“The effective upgrade to Baa3 reflects continued evidence of Vallourec’s successful execution of its strategic transformation, including a shift toward higher-value products and a substantial reduction of its industrial fixed cost base since 2022,” Moody’s Ratings commented.

S&P Global said that “the improvement in Vallourec’s margins is sustainable and, as a result, its business is more resilient. Despite some macroeconomic uncertainty, we anticipate that Vallourec’s solid position in the premium OCTG global market will support material cash flow generation.”

Philippe Guillemot, Vallourec’s board chairman and CEO, praised the rating changes.

“Securing Investment Grade ratings from Moody’s, S&P Global and Fitch highlights our robust financial health and growing track record of cash generation,” he said. “Looking ahead, we expect continued improvement in cash conversion as the associated restructuring cash out of the New Vallourec plan diminishes and our strategic actions continue to deliver profitable growth.

“Importantly, this status provides us with more flexibility to optimize our balance sheet and enhances our access to debt capital markets under more favorable conditions, thus positioning us to continue delivering sustainable value for our shareholders.”