Moody’s Promotes MMK to Ba1

UrBC, Chelyabinsk, April 27, 2016. Moody’s Investors Service promoted Magnitogorsk Iron & Steel Works’ CFR from Ba2 to Ba1 and its PDR from Ba2-PD to Ba1-PD.

Incidentally, these ratings conform with Russia’s current ones; MMK is now one of the few national metallurgical enterprises whose ratings got confirmed by Moody’s.

The improvement is reflexive of Moody’s expectations for MMK financial indicators to remain at least as good, for its debt burden to be reduced, and for the company’s performance indicators, profit figures, and cash generation to still remain high.

According to a press release by Moody’s, MMK’s rating is based on the company’s impressive financial performance indicators, stable cash flow generation, low prime cost and high profits, conservative financial practices, a diversified product portfolio, a good share of the national high value-added rolled steel market, good international sales and a strong, competitive position on the global markets (thanks to the company being at the beginning of the global cost curve), and good liquidity figures.

Moody’s reports the rating was also affected by a limited degree of MMK’s involvement in the mining industry: the company can meet 25% of its iron ore needs and 40% of its coking coal needs.

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