Fitch upgrades Novolipetsk Steel

Fitch Ratings said it upgraded PJSC Novolipetsk Steel's long-term issuer default rating and senior unsecured rating to BBB from BBB-.

The outlook is stable.

The upgrades reflect Novolipetsk Steel's tested conservative financial policy during the supply driven price turbulence in 2016 to 2017, along with increased protectionism since 2018, Fitch said.

The company's strong financial profile has been driven by a combination of efficiencies achieved through strategic initiatives, very low steel-making costs backed by self-sufficiency in iron ore and modest capital expenditure, the agency said.

This allowed the company to repay more than $700 million of debt in the past three years and achieve one of the industry's lowest funds from operations adjusted gross leverage at 0.8x at year-end 2018, Fitch said.

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