S&P cuts Azovstal Iron

Standard & Poor's said it lowered the long-term corporate credit rating on JSC Azovstal Iron and Steel Works to B from B+ and on its senior unsecured debt to B- from B with 5 recovery rating.

Ratings were removed from CreditWatch with negative implications, where they were placed on Oct. 17.

The outlook is negative.

According to S&P, the downgrade reflects Ukraine's worsening macroeconomic environment, highlighted by the downgrade of the sovereign.

Ratings are constrained by the company's position as a commodity player in a cyclical industry and its aged asset base that requires large capital expenditures, the agency said.

These risks are tempered by Azovstal's high proportion of exports within sales, access to low-cost resources in Ukraine and vertical integration in iron ore, coke and scrap at the parent level, the agency noted.

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