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Mechel Obtains International Credit Rating

05/28/2010 - Moody's Investors Service has assigned a B1 corporate family rating to Mechel and a B1 Probability of Default Rating. Moody's Interfax Rating Agency also assigned an A2.ru.ru national scale rating to the company.

Moody's Investors Service has assigned a B1 corporate family rating (CFR) to Mechel and a B1 Probability of Default Rating. Moody's Interfax Rating Agency also has assigned an A2.ru.ru national scale rating to the company. The outlook on the ratings is stable.
 
Mechel quotes the official Moody’s release as stating:
 
“The CFR of Mechel’s reflects: 1) the company’s role as a leading domestic steel and coal producer with strong positions in key businesses including production of specialty steel and alloys; 2) the company’s largest coal reserve base in Russia; 3) favorable business profile results from high degree of vertical integration which ensures the stable production and to some extent preserves operating margins; the company has internal captive demand for coking coal and iron ore in steel production and for steam coal – in power generation; 4) strategic location of its key assets close to the major steel consuming markets as well as the ownership and control of essential infrastructure including ports, rolling stock and power plants which provide guaranteed access to export markets; 5) combination of underground and open pit mining operations with no significant concentration on any single mine mitigates the risks of interruption in coal production; 6) good disclosure and adequate corporate governance supported by NYSE listing.”
 
Stanislav Ploschenko, Mechel’s Chief Financial Officer, commented, “The obtained rating proves significant improvement of Mechel’s financial position and as a result creditworthiness of the company. The rating will help us in the ongoing optimization of our credit portfolio, in particular to decrease the cost of the debt service and further improve its structure.”
 
Mechel is one of the leading Russian mining and metals companies. Its business includes four segments: mining, steel, ferroalloy, and power. The company unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Its products are marketed domestically and internationally.