Fitch rates Acron program BB-, view to positive

Fitch Ratings said it revised the outlook on PJSC Acron's long-term issuer default rating to positive from stable and affirmed the issuer default rating at BB-.

The agency also assigned Acron's prospective RUB 50 billion bond program an expected rating of BB-(EXP).

Fitch said the positive outlook reflects Acron's strong progress in deleveraging in 2015. The weak ruble and ramp up of phosphate operations underpinned positive free cash flow (FCF) and led to FFO net adjusted leverage of 1.7 times, which is below the positive rating guidance of 2 times.

In 2016-2017, the agency said it expects Acron's divestment of its stake in Uralkali, moderate investment pace and the weak ruble to mitigate low fertilizer pricing and translate into low 1 time to 1.5 times leverage.

The prospective bond issues under the RUB 50 billion bond program will be issued at the Acron level and will only be subordinated to Acron's $525 million pre-export finance facility. Fitch does not consider the bonds to be structurally subordinated to debt at Acron's cash-generating subsidiaries as Acron's share of the group's EBITDA and debt is broadly the same.

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