Moody’s rates Rusal notes B1

Moody's Investors Service said it assigned a B1 (LGD 5) rating to the proposed senior unsecured notes to be issued by Rusal Capital DAC, a wholly owned subsidiary of United Co. Rusal plc.

The outlook is stable.

The notes will be guaranteed by Rusal, which is the holding company for the group, along with three wholly owned large aluminum plants and RTI Ltd., Moody’s said.

Rusal's Ba3 corporate family rating and Ba3-PD probability of default rating were not affected by this action, Moody’s said.

The B1 rating is one notch below Rusal’s Ba3 corporate family rating due to the overall group's capacity to service its debt and a view that the unsecured notes are not as strongly positioned compared to Rusal’s loans from Sberbank, the agency said.

The noteholders have a pari passu claim to the cash flows of the Rusal group, Moody’s said, but only have a residual claim on the proceeds from the hypothetical sale of the stake in Norilsk Nickel, ranking behind Sberbank.

The proceeds will be used to repay part of the group's existing debt due in 2017 and 2018, so the new notes placement will not increase Rusal’s leverage, the agency added.

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