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Standard & Poor’s Global Ratings revises MMK outlook to stable

Steel News - Published on Fri, 03 Apr 2020

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PJSC Magnitogorsk Iron & Steel Works announced that Standard & Poor’s Global Ratings has revised MMK outlook from positive to stable and affirmed the rating at 'BBB-'. The outlook revision reflects uncertainties about near-term economic prospects, demand/supply and pricing for steel and raw materials, potential protection measures, and supply chain disruptions in the international steel markets. It also reflects that the S&P revised expectation that GDP will contract in Russia by 0.9%, from 1.8% growth previously, which, coupled with COVID-19 spread prevention measures, would result in a reduction in steel demand. The stable outlook balances MMK's currently very significant financial cushion with the S&P expectation of bottom-of-the-cycle conditions for the steel market in 2020 and risks related to COVID-19.

S&P said "We don’t expect MMK’s leverage to become meaningful in 2020, as the company’s debt was below its cash balances at the beginning of 2020. We therefore anticipate MMK’s FFO to debt to be much higher than 60% in the coming years, including 2020."

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Posted By : Rabi Wangkhem on Fri, 03 Apr 2020
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