Mass Media Overview
S&P Global Ratings elevates Severstal to investment grade
05.08.2016 16:24
http://www.severstal.com/
5 August 2016
PAO Severstal, one of the world’s leading steel and steel-related mining companies, announces that S&P Global Ratings, a global leader in credit ratings and research, has upgraded Severstal to 'BBB-' from 'BB+' in its long-term corporate credit rating. The outlook is negative. Severstal’s Russia national Long-term rating has also been raised to 'AAA'(rus) from 'AA+'(rus). At the same time, the issue ratings on Severstal's senior unsecured notes has changed to 'BBB-' from 'BB+', in line with the corporate credit rating.
The upgrade reflects Severstal's industry leading operating efficiency, low debt, and conservative financial policy, which should enable the company to maintain robust credit metrics in the next two years even in the context of the industry downturn and weakening Russian steel demand, as demonstrated over the last six months.
The agency also acknowledges that the group's robust operating results have not yielded to challenging market conditions and volatile steel prices. It bases its assessment on Severstal's strong competitive position on its vertical integration in iron ore and coking coal, coupled with its high share of high-value-added products, modern steel making facilities, and economies of scale at its main site in Cherepovets.
Alexey Kulichenko, Chief Financial Officer of Severstal, said: “We are pleased to note S&P Global Ratings’ decision to elevate Severstal to ‘BBB-‘. This demonstrates that our strategy to focus on cost-control, customer care and HVA products in this complex economic environment is proving successful”.