S&P ups Magnitogorsk

Standard & Poor's said it raised its long-term corporate credit rating on OAO Magnitogorsk Metallurgical Kombinat to BB from BB-, reflecting continuing improvements in the company's operating performance and financial risk profile.

The outlook is stable.

At the same time, the Russia national-scale rating on MMK was raised to ruAA from ruAA-, the agency said.

S&P noted that the rating action reflects the gradually enhancing quality of the company's asset base, together with increased operating efficiency, considerable debt reduction, strong liquidity and still-high cash flow generation.

The ratings are constrained by the company's business risk profile, as reflected in its position as a single-site commodity producer in the cyclical steel industry, its high capital expenditure needs and the risks related to operating in the Russian Federation (foreign currency BBB+/stable/A-2, local currency A-/stable/A-2), S&P added.

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