11th Apr 2016 16:33
LONDON (Alliance News) - Moody's on Monday placed FTSE 250-listed steel, mining and vanadium company Evraz PLC's Ba3 rating on review for downgrade.
Moody's has placed on review for a downgrade its Ba3 corporate family rating and Ca3-PD probability of default rating for Evraz, as well as the B1 (LGD 5) senior unsecured ratings assigned to the notes issued by Evraz and Raspadskaya Securities Ltd.
The ratings agency said this reflected the "material deterioration in Evraz's financial performance in the second half of 2015, which led to Evraz's year-end 2-15 financial metrics weakening substantially beyond Moody's expectations."
"Moody's does not expect any meaningful sustainable recovery in steel prices over the next 12-18 months in light of the continuing weak domestic demand in Russia and steel overcapacity in international markets. Nevertheless, Moody's recognizes that the company maintains a prudent financial policy and will pursue cost cutting. The rating agency also positively notes the company's solid liquidity and recent measures to extend its debt maturity profile," Moody's said.
The review for downgrade will focus on Evraz's ability to reduce its adjusted gross debt to Earnings before interest, tax, depreciation and amortisation ratio below 3.5 times over the next twelve to eighteen months whilst maintaining a positive free cash flow generation.
Shares in Evraz closed up 6.9% at 99.55 pence Monday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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