Moody's confirms Azovstal notes at B3

Moody's Investors Service said it confirmed the B3 rating for the senior unsecured loan participation notes due 2011 issued by Azovstal Capital BV. The notes are issued for the sole purpose of financing a loan to Azovstal Iron and Steel Works. The corporate family rating is unchanged at B2.

The outlook was changed to developing based on the fact that shareholders intend to consolidate steel and mining assets, including Azovstal, into a holding company in the next six to 12 months.

The developing outlook reflects the expectation that the creation of such a group should improve Azovstal's vertical integration and strengthen its business profile, the agency said, which could put upward pressure on its corporate family rating.

However, the uncertainty of the group's financial profile weighs negatively on the current ratings, Moody's added.

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