Moody's lifts Evraz outlook to positive

Moody's Investors Service said it changed the outlook on all ratings assigned to Mastercroft and Evraz Securities SA to positive from stable.

Moody's said the change in the outlook reflects: 1) strengthened business risk profile due to increased vertical integration that should provide a hedge against volatility in raw material prices; 2) the group's progress in consolidating its ownership in the key operating companies following acquisition of some of the minority stakes; 3) Evraz's strategy to gain access to European export markets and diversify from the volatile emerging markets; 4) Evraz's prominent position on the domestic market and exposure to growing domestic industries; and 5) Evraz's strong financial profile and track record since the rating was originally assigned.

The strong financial profile is mitigated in part by: 1) event risk given corporate strategy for penetrating new export markets and, Evraz's potential interest in participating in the upcoming privatization of VAT Krivorozhstal in Ukraine; 2) execution risk associated with integrating recent acquisitions in new markets extending Evraz's reach; 3) and some contingent exposures associated with shareholder lawsuits tied to an earlier acquisition.

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