Moody's rates Norilsk Nickel national scale Aa1.ru

Moody's Interfax Rating Agency said it assigned a Aa1.ru national scale rating to Russia's OJSC MMC Norilsk Nickel and Moody's Investors Service affirmed Norilsk's existing global scale ratings, including the Ba1 corporate family rating, Ba2 long-term issuer rating and the Ba2 rating on the group's $500 million notes issued through Norilsk Nickel Finance Luxemburg SA.

The outlook on the global scale ratings remains stable.

The Ba2 rating on the notes reflects the relatively high proportion of secured debt in the group's capital structure and Moody's expectation that, even if the group expands its unsecured debt financing, it may continue to rely on secured bank debt to finance its ongoing operations, the agency said.

Moody's said the Ba1 corporate family rating and Aa1.ru national scale rating reflect Norilsk Nickel's significant global market shares in several metals, the group's substantive nickel reserve base, the generally low operating cost positions, an increasing reliance on longer-term volume contracts with key customers, favorable near-term supply side fundamentals in nickel and copper and the group's very solid balance sheet.

Moody's went on to say the ratings also reflect the risks associated with the instability regarding Russian legal and political developments, the group's high cash flow volatility, a continued lack of transparency regarding the group's PGM reserves and the group's concentrated ownership structure.

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