Moody's may cut Evraz

Moody's Investors Service said it placed Evraz SA's Ba2 corporate family rating, Ba2 rating for senior notes due 2009 and Ba3 rating for senior notes due 2015 on review for possible downgrade following the recent announcement of the acquisition of Ipsco's Canadian plate and pipe business from SSAB for a net cost of $ 2.3 billion.

Evraz has announced on March 15 that it has reached a definitive agreement to acquire IPSCO tubular business for $ 4.025 billion with a back to back agreement with OAO TMK and its affiliates to resell certain of the acquired businesses for $ 1.2 billion in 2008 and an expectation for an additional $ 0.5 billion to be executed in 2009, the agency said.

Moody's noted that it will focus its review on the strategic logic of the acquisition of the Ipsco tubular business which is coming after a number of different transactions announced by the company over the past year, as well as the integration risk of such businesses and the level and stability of the anticipated contribution of these new businesses to the cash flow generation of Evraz.

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