Metinvest rating upgraded to B3/Stable by Moody’s
2 January 2019
The corporate family credit rating of Ukraine’s
largest steelmaker Metinvest (METINV) was upgraded by Moody’s to B3/Stable on Dec.
27 following its Dec. 21 sovereign upgrade.
Moody’s assessment of Metinvest’s rating factors is
consistent with a Baa category rating, but the ratings are constrained by the
holding’s exposure to the operating environment in Ukraine, volatile prices of
steel and raw materials, as well as limited potential for growth of Ukraine’s
domestic steel market, the rating agency said. Nevertheless, Moody’s rated
Metinvest one notch above Ukraine’s sovereign issuer level.
Metinvest’s two other long-term credit ratings are
from S&P – a B-/Stable grade that was initiated on Jan. 12, 2018 and which is
the same as Ukraine’s – and from Fitch, which offered a B/Positive assessment, one notch
above Ukraine’s sovereign that was raised from RD on Apr. 6, 2017.
Dmytro Khoroshun: Metinvest enjoyed strong profitability (monthly EBITDA above USD 200
mln) for more than a year now, but we expect a substantial EBITDA drop in the coming months due to the recent decrease in Ukraine’s export
steel prices. Nevertheless, we agree with Moody’s that the company’s B3 rating
has a significant cushion with respect to its financial indicators and should
not be affected by a moderate market downturn.
