Brussels: The world’s largest steel maker ArcelorMittal SA said on Tuesday that there was strong demand for the €1.1 billion in bonds it put up for sale.
It said demand led it to increase the investment it is seeking from an initial euro750 million bond sale that it launched earlier Tuesday. It said it could still increase the offering to €1.25 billion.
Corporate bonds have faced a tough market in recent months as investors see a higher risk of default during an economic downturn that is hurting company profits.
ArcelorMittal insisted last week that it did not need to raise more money by issuing new shares and that it was moving aggressively to reduce debt.
The company had net debt of $26.5 billion at the end of last year, a massive burden it accumulated from a recent expansion program and Mittal Steel Co.’s 2006 takeover of Arcelor which formed the company.
ArcelorMittal, which makes some 10% of global steel, posted its first quarterly loss in the last three months of 2008 as demand from car makers and construction plunged.
It is stepping up cutbacks as it tries to pay off $10 billion in debt by the end of this year. The company has sharply reduced output, shuttered plants and laid off temporary staff. Some 9,000 workers have also been offered voluntary redundancy.
CEO Lakshmi Mittal warned in February that it could take up to two and a half years for the steel market to bounce back. He forecast worldwide demand to fall between 7 and 10% this year.