Fitch ups Evraz, debt to BB

Fitch Ratings said it upgraded Evraz Group SA's long-term issuer default rating and senior unsecured debt instrument rating to BB from BB-.

The short-term issuer default rating was affirmed at B.

The outlook is stable.

Fitch said the upgrade reflects Evraz's successful reduction of net debt to $4 billion, leading to funds from operations (FFO) adjusted gross leverage of 2.4 times and FFO adjusted net leverage of 1.8 times at end-2017.

The company has a target for absolute net debt of $3 billion-$3.5 billion and for net debt/EBITDA below 2 times through the industry cycle, which reflects the group's intention to maintain financial discipline.

Fitch said its rating case assumes some moderation in steel prices after a peak in 2018 on the back of lower raw material costs and forecasts an increase in FFO adjusted gross and net leverage in 2019 and 2020.

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