S&P rates Magnitogorsk bond ruAA

Standard & Poor's said it assigned a ruAA Russia national scale senior unsecured debt rating to the proposed RUB 5 billion three-year bond to be issued by OAO Magnitogorsk Metallurgical Kombinat (BB/negative/B; Russia national scale ruAA).

Proceeds will be used to refinance short-term debt.

The corporate credit rating reflects an assessment of the company's business risk profile as "fair" and financial risk profile as "significant," the agency said.

The business risk profile is constrained by the company's position as a land-locked, single-site producer with limited vertical integration in raw materials, S&P said.

The current severe downturn in the global steel sector also constrains MMK's business risk profile, the agency noted.

A low cost profile and low share of semi-finished products in output support the company's business risk profile, the agency said.

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