Fitch Ratings claims Evraz isn’t doing enough

3 August 2009 (08:41)

The international rating agency decreased the metallurgical and mining giant Evraz Group SA’s long-term foreign currency Issuer Default Rating as well as its priority unsecured rating from BB to BB-. Fitch has also placed Mastercroft and Evraz Group SA’s long-term foreign currency IDRs and their priority unsecured ratings on the Rating Watch, with Negative Rating Outlook. Now Mastercroft, with most of its assets based in Russia, is Evraz’s key daughter enterprise. Both companies’ short-term IDRs have been affirmed at B.

‘The rating drop indicates that Fitch feels the steps Evraz management takes are insufficient just now to make up for the nosediving revenues brought about by plummeting global demand and steel prices. The demand has been particularly low on the construction and infrastructure markets, which means Evraz is especially vulnerable to these markets’ risks. The business’s Negative Rating Watch status reflects the risks still associated with the possibility of failed covenants on the company’s various credit lines,’ the agency explains.

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