Moody's boosts Eurasian Resources

Moody's Investors Service said it upgraded Eurasian Resource Group Sarl’s corporate family rating to B1 from B2 and the probability of default rating B1-PD from B2-PD. The agency changed the outlook to stable from negative.

“Today's upgrade of ERG's ratings primarily reflects Moody's view that the company's leverage will decrease amid recovery in ferrochrome, cobalt, copper, iron ore, aluminum prices, while continuing growth of production and earnings following the ramp up of phase 2 of cobalt and copper production at its Metalkol RTR processing production facility in the government of Democratic Republic of the Congo (DRC, Caa1 stable) that will augment this positive backdrop,” the agency said in a press release.

Moody's said it forecasts ERG's leverage to be at about or below 3x Moody's-adjusted total debt/EBITDA in 2021-22 under a range of pricing scenarios.

The revised outlook reflects the expectation the company will sustain its leverage at about or below 3x-3.5x over the next 12-18 months through a combination of EBITDA growth and planned debt repayments, supported by favorable global demand and prices for ferrochrome, cobalt, copper, aluminum and iron ore, while maintaining robust liquidity over the same period, Moody’s said.

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