UPDATE: Bank of America Upgrades ArcelorMittal to Buy on Reduced Risk

Bank of America raised its rating on ArcelorMittal

from Neutral to Buy as it sees little risk of rights issues following the company's downgrade to junk status from Moody's. Bank of America said, "Before the Moody's downgrade, MT needed to raise $7bn by Q1 in order to meet ratios for an IG rating. We saw risk of a “small" rights issue ($2-$3bn) topped up by proceeds from asset sales which may not have met the $7bn target, but which could have given MT "breathing room" - i.e. given Moody's confidence that MT was serious about reducing debt, delaying the credit review and allowing MT time to de-gear organically. Post the downgrade, a “small” rights issue is no longer an option, in our view. We think MT will now need to raise the full $7bn in order to regain an IG rating. [W]e think that MT will continue to focus on selling assets and reducing debt via operating cashflow." ArcelorMittal closed at $15.81 on Tuesday.