Fitch affirms Evraz

Fitch Ratings said it affirmed Evraz Group SA's issuer default ratings at long-term BB and short-term B, and its senior unsecured ratings at BB.

Fitch also affirmed Evraz subsidiary Mastercroft Ltd.'s issuer default ratings at long-term BB and short-term B. Evraz Securities SA's senior unsecured rating is affirmed at BB.

The outlook on the long-term issuer default rating is stable.

"The ratings reflect Evraz's enhanced business profile, solid credit metrics as well as a track record of successful consolidation of acquired assets," Angelina Valavina, director of Fitch's industrials team, said in a written statement.

The group's acquisition strategy resulted in fiscal 2006 leverage of 1 times, which is line with international steel peers but higher than that of under-leveraged Russian steel producers, Fitch said. Evraz's has an internal financial leverage target, or total debt-to-EBITDA ratio, of below 1.5 times, the agency said.

Possible concerns are rising labor and energy costs and high capital intensity, Fitch said.

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