Fitch rates EuroChem bond BB

Fitch Ratings said it assigned OJSC EuroChem Mineral and Chemical Co. a national long-term rating of AA-(rus) and a long-term local-currency issuer default rating of BB. The agency also affirmed its long-term foreign-currency issuer default rating at BB, long-term foreign-currency senior unsecured rating on $290 million loan participation notes at BB and short-term foreign-currency issuer default rating at B. The agency also said it assigned to its proposed RUB10 billion domestic bond issue an expected long-term local-currency senior unsecured rating of BB and a national long-term rating of AA-(rus). The ratings are contingent upon the receipt of final documents.

The outlook is negative.

Fitch said that sureties from EuroChem's Novomoskovskiy Azot nitrogen plant and Kovdorskiy GOK apatite mine place the domestic bonds in a stronger position structurally than the existing senior unsecured loan participation notes.

The negative outlook continues to reflect a view that, against the backdrop of difficult market conditions in the fertilizer sector, monthly amortizations could put pressure on its cash flow generation and financial metrics in the near term, the agency said.

The ratings continue to be supported by its leading market positions in the Russian fertilizer sector and strategic focus on productivity gains and vertical integration, Fitch said.

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