S&P rates OMZ bond ruBB

Standard & Poor's said it assigned a ruBB Russia national scale rating to the proposed RUR 1.6 billion senior unsecured bond issued by OAO OMZ (Uralmash-Izhora Group) (CCC+/developing).

The proposed bond will have a maturity of five years with a put option, and the coupon will depend on market conditions during placement.

Proceeds are expected to be used to refinance debt and for the company's investment program.

Ratings remain constrained by the company's highly leveraged financial profile, an aged asset base and challenging competitive environment, the agency said.

These factors are partially offset by OMZ's strong positions in the domestic market, its fairly diverse end products and market segments and some cost advantages over international competitors, S&P noted.

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