Moody’s upgrades MHP, Metinvest and Ferrexpo ratings to Caa1

Moody’s Investors Service upgraded the corporate
family ratings of MHP (MHPSA), Metinvest (METINV) and Ferrexpo (FXPOLN) to
Caa1, which is one notch above Ukraine’s sovereign rating, the agency reported
on Aug. 29. The ratings were upgraded to the country issuer ceiling after it
was increased on Aug. 25.

Moody’s also upgraded to positive the rating outlook
for Metinvest and MHP (from neutral), while retaining its neutral outlook for
Ferrexpo, highlighting the latter’s refinancing risk amid large debts due in
2018-2019 (USD 485 mln).

Alexander Paraschiy: Moody’s
action is in line with our view that Metinvest’s risk profile is smaller than
for Ferrexpo (refer to our note of Apr. 26), given the former’s better product
diversification and more extended debt repayment schedule. This confirms our
bullish view on Metinvest bonds, as well as neutral view on the bonds of MHP
(which trade within the sovereign curve) and Ferrexpo.