Fitch affirms Metalloinvest

Fitch Ratings said it affirmed JSC Holding Co. Metalloinvest's long-term foreign- and local-currency issuer default ratings at BB-, national long-term rating at A+(rus) and foreign-currency senior debt rating at BB-. The outlook for the long-term ratings is stable.

The agency said the affirmations reflect Metalloinvest's strong operational profile including the second-largest iron ore reserves globally and a first quartile cost position for both iron ore pellets and hot briquetted iron. In 2011, the company posted a record-high $9.9 billion of sales and $3.8 billion of EBITDAR, Fitch said, with its 38% EBITDAR margin back at pre-crisis levels.

Nevertheless, a $2.2 billion investment in a minority stake in MMC Norilsk Nickel (BB+/stable) as well as capex and dividends outpaced the robust $2.8 billion funds from operations in 2011, resulting in mildly negative free cash flow, the agency noted.

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