Fitch lifts Metalloinvest

Fitch Ratings said it upgraded Metalloinvest's long-term issuer default rating and senior unsecured ratings to BB+ from BB.

The outlook is stable.

The upgrades reflect Metalloinvest's continually strong operational profile, including low cost pellet, hot briquette iron and long steel products, Fitch said, and a strategic focus to move the product portfolio further downstream.

The upgrades also consider the enhanced predictability of the company's financial profile following a new distribution policy that was approved at the beginning of 2019, Fitch said.

The new distribution policy targets positive free cash flow after dividend, the agency said.

The ratings also take into account management's aim to reduce debt, which underpins Metalloinvest's further de-leveraging prospects, Fitch said.

Recent supply-side disruptions have led to a re-basement of the iron ore market and its deficit in the medium-term, causing iron ore prices to remain elevated, the agency noted.

Fitch said it expects the company will use some of the financial flexibility created by the continued favorable price environment for debt reduction in line with its financial policy.

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