Fitch rates Evraz notes BB-

Fitch Ratings said it assigned an expected senior unsecured rating of BB- to Evraz Group SA’s planned notes and placed the rating on Rating Watch negative.

The rating is in line with Evraz’s long-term issuer default rating of BB-, which also is on negative watch.

The proceeds from the new notes are planned to be used to tender the company’s outstanding 2017 and 2018 notes and Raspadskaya’s outstanding 2017 notes, Fitch said.

The proposed notes are rated at the same level as the issuer default rating, reflecting that the notes will be a senior unsecured obligation of Evraz and will rank equally in right of payment with all existing and future senior unsecured and unsubordinated obligations, the agency said.

The negative watch placement follows the release of the company’s 2015 annual results, which fell below base-case expectations, Fitch said.

The financial results reflected generally weak demand trends for steel in the Russian market and, in particular, construction steel, the agency said.

The watch is expected to be resolve in the next three- to four-months, Fitch said.

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