S&P gives Evraz bond BB-

Standard & Poor's said it assigned its BB- senior unsecured debt rating to the proposed dollar fixed-rate bond to be issued by Evraz Group SA (BB-/positive).

The amount, maturity and coupon will depend on market conditions during placement, the agency said, noting that the proceeds of the bond will be used for general corporate purposes, but are expected to help fund recently announced acquisitions, notably the $2.3 billion purchase of the North American steel tubular operations of SSAB Svenskt Stal AB (BBB/stable/A-2).

According to S&P, the bond is rated at the same level as the BB- corporate credit rating on Evraz and the group's two existing rated senior unsecured bonds of $750 million due 2015 and $300 million due 2009. As with the existing senior unsecured bonds, secured debt of $2.7 billion at the issuer level has a prior-ranking position.

The agency noted that the ratings on Evraz reflect its business position as a largely Russia-based commodity steel producer and are constrained by an acquisitive financial policy that leads to higher leverage than domestic peers.

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