Fitch upgrades Severstal

Fitch Ratings said it upgraded PAO Severstal’s long-term issuer default rating to BBB- from BB+.

The agency also upgraded the company’s short-term foreign-currency issuer default rating to F3 from B and national long-term rating to AA+(rus) from AA(rus).

The outlook is negative.

The upgrade reflects Severstal’s resilient financial performance despite a challenging market environment, Fitch said, and continued de-leveraging, which has resulted in funds-from-operations gross leverage declining to less than the positive sensitivity guideline of 1.5x.

The ratings also reflect Severstal’s strong operational profile coming from full self-sufficiency in major raw materials for steel making, balanced product mix and strong sales diversification, the agency said,

The outlook is capped by the negative outlook on the Russian sovereign, Fitch said.

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