CSN 3Q25: Mining Strength Offsets Steel Weakness

Deleveraging progress, resilient iron-ore prices, and liquidity coverage through 2027 support our Overweight view

We maintain our Overweight recommendation on the CSNBZ 4.625% 2031s (yielding 10.0%, priced at $77.5) and CSNBZ 5.875% 2032s (yielding 10.1%, priced at $80.4) for their attractive carry, potential price upside, and wide spreads versus LatAm BB peers. In our view, current spreads already reflect the pressures from weaker steel fundamentals, elevated capex, and limited free cash flow in the near term. While the CSNBZ 6.750% 2028 notes and CSNBZ 8.875% 2030 notes also offer an appealing above-10% carry, we favor the lower-priced bonds, which we think provide more robust downside protection.