S&P revises Polyus Gold to stable

Standard & Poor's said it revised the outlook on Polyus Gold International Ltd. to stable from positive.

At the same time, the agency affirmed the BB+ long-term corporate credit rating on Polyus.

In addition, S&P affirmed the issue rating on Polyus' $750 million senior unsecured notes at BB+. The recovery rating is unchanged at 3, indicating an expectation of meaningful (50%-70%) recovery prospects in the event of a payment default.

This outlook revision follows the recently announced delays in the construction of Polyus' greenfield flagship gold mine project Natalka, as well as a change in the agency's working gold price assumptions.

S&P now forecasts that Polyus' free operating cash flow (FOCF) will remain negative in 2015, whereas previously we assumed positive FOCF for that year.

A secondary factor in the outlook revision was the recent downgrade of the Russian Federation (foreign currency: BBB-/negative/--).

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