Standard and Poors has lowered its rating on Tata Steel’s UK operation, Tata Steel UK Holdings Limited (TSUKH), Kallanish learns.

The rating agency lowered its long-term corporate credit rating on TSUKH to 'B+' from 'BB-' but says that the outlook is stable. At the same time, S&P affirmed its 'B' short term corporate credit rating on the U.K.-based company, it confirms.

“We lowered the rating on TSUKH following the downgrade of the company's parent Tata Steel Ltd. (BB-/Stable/--). We assess that TSUKH is a "highly strategic" subsidiary of Tata Steel and expect the parent to continue to support TSUKH.  We therefore rate TSUKH two notches above its stand-alone credit profile,” S&P adds.

“We believe Tata Steel is fully committed to supporting TSUKH because it considers the subsidiary to be a strategic investment… Tata Steel also intends to maintain good banking relationships with TSUKH's lenders. Nevertheless, TSUKH's operating performance is weak, and the company has a significantly weaker competitive position than the overall group,” the rating agency says.