Fitch raises Rusal

Fitch Ratings said it upgraded Rusal’s long-term issuer default rating to BB- from B+. Fitch also raised Rusal Capital DAC's senior unsecured notes to BB- from B+. The recovery rating is RR4.

“The upgrade of Rusal's long-term IDR reflects strong cash-flow generation from the aluminum business in a very supportive market and robust dividends from PJSC MMC Norilsk Nickel (NN; BBB-/stable) over the next few years, together with the company's intention to reduce gross debt by more than $1 billion over the next 24 months. Global demand for aluminum continues to show positive momentum. The most recent market data indicate a balanced market for 2021 and increasing deficits for subsequent years, which will help to run down large stocks outside of China and will support prices,” Fitch said in a press release.

Fitch said it now projects funds from operations gross leverage improving towards 3x by 2022 and FFO net leverage towards 2x in the near term.

The outlook is stable.

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