Fitch rates EuroChem BB

Fitch Ratings said it affirmed JSC MCC EuroChem’s long-term foreign- and local-currency issuer default rating, national long-term rating at AA-(rus), short-term foreign-currency issuer default rating at B, local-currency senior unsecured rating at BB and national long-term unsecured rating at AA-(rus).

Fitch also said it assigned a long-term issuer default rating of BB to the newly established EuroChem Group AG.

The agency also affirmed the rating on EuroChem Global Investments Ltd.’s foreign-currency senior unsecured rating on the loan participation notes at BB.

The affirmation reflects expectations for EuroChem’s funds-from-operations to decline to about 2.3x over the next two years from 2.8x at the end of 2013, Fitch said.

The ratings are underpinned by EuroChem’s business profile with self-sufficiency in ammonia and phosphates in Russia, strong market presence in Europe and CIS and robust diversification across fertilizer products, the agency said.

The ratings are constrained by the company’s sizable investments in two potash projects, inherent price volatility in the fertilizer sector and the corporate governance discount that Fitch said it typically applies to most Russian issuers.

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