Fitch affirms Norilsk Nickel

Fitch Ratings said it affirmed OJSC MMC Norilsk Nickel's long-term issuer default rating and senior rating at BB+ and short-term issuer default rating at B. The outlook is stable.

The agency said the ratings continue to reflect the company's exceptional operational profile and historically conservative financial profile. Disregarding the negative implications of the ongoing shareholder dispute and subject to the maintenance of an appropriate financial profile, Fitch believes that Norilsk Nickel could return to an investment-grade rating.

The company's long-term issuer default rating is notched down by three notches from its standalone level due to a combination of issuer-specific corporate governance issues and the weak Russian business environment, Fitch said.

The key individual corporate concern is the ongoing dispute between key Norilsk Nickel shareholders United Company Rusal plc and Interros Group. Fitch is concerned that an intensification of this dispute may result in actions that are to the detriment of debtholders and minority shareholders. The agency said a resolution to the shareholder dispute, however this may ultimately occur, would seem likely to involve an increase in Norilsk Nickel's debt burden.

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