MOODY'S Upgrades MMK'S Rating to Ba1
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.
The upgrade of MMK's rating reflects Moody's expectation that the company's financial metrics will remain robust as it proceeds with debt reduction plans and the Company will maintain its strong operating performance, high profitability, positive free cash flow generation and solid liquidity.
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.