International credit rating agency Moody’s has announced that it has upgraded the credit rating of Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) from Ba2 to Ba1. The outlook on the ratings is negative, in line with the negative outlook for Russia’s sovereign rating.
According to Moody’s, MMK’s rating upgrade to Ba1 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 its strong market share for high value-added flat steel products in Russia, its 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 its solid liquidity.
Moody’s also stated that it has confirmed the Ba1 corporate family ratings of three Russian steel/mining companies, NLMK, Severstal and Norilsk Nickel, due to these companies' strong business profiles and low-cost position which supports their competitiveness in the international markets. However, the companies' Ba1 ratings will remain constrained by Russia's Ba1 sovereign rating with a negative outlook.