S&P ups Severstal

Standard & Poor's said that it raised the long-term corporate credit and Russia national-scale ratings on OAO Severstal to BB/ruAA from BB-/ruAA-. The outlook is stable.

S&P said that it revised the outlook on Severstal Columbus LLC to positive, following the announcement that phase-two expansion will be completed in 2011, well ahead of the initial plan of 2012. S&P affirmed the B long-term corporate credit rating.

The outlook revision reflects the expectation that once phase-two construction is completed, the company's steelmaking capacity should double and profitability and cash flow should in turn dramatically improve from the weak levels, the agency added.

The upgrade reflects Severstal's robust profitability and financial metrics seen in 2010 and early 2011 and which are expected to continue in coming years, the agency added.

Severstal's ratings are constrained by the highly cyclical, capital intensive and competitive nature of the steel industry and by Severstal's exposure to the risk of operating in Russia where its key cash-generative assets are located, the agency said.

The ratings are supported by stabilized global steel market conditions, Severstal's healthy credit metrics, moderate financial policy, low cost position in Russia, vertical integration into mining and solid market share in Russia, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.