Ferrexpo credit rating outlook raised to Positive by Moody’s

Moody’s announced on Dec. 10 it has upgraded its
outlook on the corporate family rating of iron ore miner and pellet maker
Ferrexpo (FXPO LN) to Positive from Stable, adding that it affirmed its rating
of Ferrexpo at B3.

The main rationale for the outlook upgrade was the
change of the agency’s outlook on Ukraine’s rating to Positivefrom Stable on Nov. 22.

Moody’s noted both the Blooming Land affair and the legal problems of Kostyantyn Zhevago,
Ferrexpo’s former CEO and majority owner, as the company’s corporate governance
challenges. These challenges, whilst having no immediate adverse effect on
Ferrexpo’s rating, act as a constraint on the rating, the agency said, adding
that Ferrexpo’s business profile and financial metrics are strong for a B3
rating.

Ferrexpo is currently rated by Moody’s one notch above
Ukraine’s sovereign level, Caa1. Moody’s previous action on Ferrexpo was a Dec.
27, 2018 upgrade of its credit rating to B3/Stable from Caa1/Positive.
Currently, Ferrexpo is also rated at B/Negative by S&P(one notch above sovereign) and B+/Stable by Fitch(two notches above sovereign).

Dmytro Khoroshun: Moody’s will likely keep Ferrexpo’s rating one notch above the
sovereign, and an upgrade of the company’s rating will only happen if the
agency upgrades Ukraine’s rating, which is possible in the next 12-18 months.