Fitch rates Petropavlovsk, notes B-

Fitch Ratings said it assigned Petropavlovsk plc an expected long-term issuer default rating of B-(EXP) with a stable outlook and an expected senior unsecured rating of B-(EXP).

At the same time, the agency assigned an expected rating of B-(EXP)/RR4 to proposed guaranteed notes to be issued by Petropavlovsk 2016 Ltd., the group's wholly owned subsidiary.

The expected issuer default rating is predicated on the successful notes issue of at least $450 million, which will be used to repay most existing loan facilities from VTB and Sberbank of Russia (BBB-/positive).

Fitch said the issuer default rating reflects Petropavlovsk's small scale of operations, the group's medium- to high-cost position, completion risks associated with the POX Hub construction and ramp-up, as well as the planned refinancing pending a successful notes issuance.

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