Moody's rates Novolipetsk notes Baa3

Moody's Investors Service said it assigned a provisional Baa3 rating to the proposed loan participation notes to be issued by, but with limited recourse to, Steel Funding Ltd. The notes will be issued for the sole purpose of financing a loan to OJSC Novolipetsk Steel under a facility agreement with Steel Funding.

NLMK will use the proceeds from the loan for general corporate purposes, including refinancing of indebtedness.

The outlook is stable.

Moody's said the provisional Baa3 rating assigned to the proposed notes, which Moody's ranks pari passu with other unsecured debt of NLMK, is the same as the issuer rating of NLMK. The noteholders will benefit from certain covenants made by NLMK in the underlying loan agreement, including a negative pledge and restrictions on mergers.

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