The Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) has announced that the international ratings agency Moody's has upgraded its credit rating from Ba3 to Ba2. The outlook on the ratings is positive.
According to Moody’s, MMK’s positive rating outlook reflects the positive trajectory of the company’s financial metrics in the past two years and its leverage in particular. While Moody’s expects that the company’s earnings will decline in 2016 amid the weakening demand for steel in the Russian market and pricing pressure in export markets, MMK should be able to sustain strong financial metrics for the rating. Moody’s stated that over the first nine months of the current year MMK reduced its debt to below $2.1 billion from nearly $2.6 billion at the end of 2014, owing to continuing positive free cash flow generation.