The international rating agency Fitch has upgraded Russian steel producer NLMK's long-term credit rating from BB+ to the investment grade level at BBB- with a stable outlook.
Fitch in its press release highlights NLMK's progress in balancing its 40 percent crude steel growth and re-rolling production capacities through acquisition of the rolling assets of Steel Invest and Finance, previously a 50/50 JV with Duferco. Fitch states that the acquisition decreases excessive exposure to the volatile semi-finished steel products market and ensures additional value to be delivered from its efficient upstream operations. Additionally, better sector exposure and geographic diversification contributes to the stability of a company's operational performance in future. Fitch positively views NLMK's commitment to continuing with its conservative financial strategy with a target net debt/EBITDAR ratio below 1.0x and following good corporate governance practices compared with other Russian peers.
This decision represents a favorable outside assessment of NLMK and the strategic, operational and organizational progress made in recent years.