Fitch Solutions: CDS on AK Steel Widens Additional 11%

NEW YORK--(BUSINESS WIRE)-- The prolonged commodities fallout is weighing heavily on AK Steel Corporation, with credit default swap (CDS) spread now indicative of deeply distressed territory, according to Fitch Solutions in its latest CDS Case Study Snapshot.

Five-year CDS on AK Steel widened out 11% last week and are now 225% wider than they were at the start of the year. The cost of credit protection on AK Steel is now pricing at all-time wide levels.

'AK Steel's deteriorating market sentiment likely stems from disappointing earnings as well as weak steel prices amid excess global steel capacity,' said Director Diana Allmendinger. 'AK Steel's recent announcement that it will temporarily idle operations at its Ashland, Kentucky facility may also be adding to the negative market sentiment.'

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.

Fitch Group is a global leader in financial information services with operations in more than 30 countries. Fitch Group is comprised of: Fitch Ratings, a global leader in credit ratings and research; Fitch Solutions, a leading provider of credit market data, analytical tools and risk services; BMI Research, an independent provider of country risk and industry analysis specializing in emerging and frontier markets; and Fitch Learning, a preeminent training and professional development firm. With dual headquarters in London and New York, Fitch Group is majority owned by Hearst.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151023005832/en/

Fitch Solutions
Diana Allmendinger
Director
+1 212-908-0848
Fitch Solutions, 33 Whitehall Street, New York, NY 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Solutions

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