Magnitogorsk Iron and Steel Works announces that Moody’s Investors Service has upgraded the company’s corporate family rating to Ba1 from Ba2 and probability of default rating to Ba1-PD from Ba2-PD.
The assigned rating corresponds with the sovereign rating of Russia and brings MMK to the club of Russia’s metals & mining majors – Severstal, NLMK and Norilsk Nickel whose ratings were confirmed by Moody’s at the previous level.
In its press release Moody’s notes that MMK’s rating reflects the company’s robust financial metrics and sustainable positive free cash flow generation, low-cost position and high profitability, conservative financial policy, diversified product mix and strong market share for high value-added flat steel products in Russia, substantial share of export sales and strong competitiveness in international markets thanks to its positioning at the very beginning of the global cost curve, and solid liquidity.
According to Moody’s the rating also considers MMK’s limited integration in mining operations, with only 25% self-sufficiency in iron ore and 40% in coking coal by capacity.
The negative outlook is in line with the outlook for Russia’s sovereign rating. (Ukrainian metal)