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Moody Completes Periodic Review of MMK

Steel News - Published on Thu, 19 Sep 2019

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Moody's Investors Service has completed a periodic review of the ratings of Magnitogorsk Iron & Steel Works and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodologies, recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

Magnitogorsk Iron & Steel Works' Baa2 long-term issuer rating is one notch above Russia's sovereign bond rating of Baa3 with a stable outlook and is on par with Russia's country ceiling for foreign currency debt. The rating reflects the company's strong financial metrics, including very low leverage, diversified product mix with a significant share of high-value-added products, low costs, strong position in the domestic market, and balanced financial policy.

MMK's rating also takes into account the company's exposure to the volatile prices of steel and feedstock, relatively low self-sufficiency in key raw materials, and limited geographical diversification of sales. MMK remains exposed to Russia's macroeconomic, regulatory and operating environment, given that most of the company's steelmaking production facilities are located in Russia.

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Posted By : Rabi Wangkhem on Thu, 19 Sep 2019
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