Fitch rates Norilsk Nickel notes BBB-

Fitch Ratings said it assigned an expected senior unsecured BBB- rating to MMC Finance Designated Activity Co.'s proposed issue of loan participation notes.

The rating of the notes is in line with PJSC MMC Norilsk Nickel's long-term foreign-currency issuer default rating of BBB- and stable outlook.

The transaction is structured in the form of an unsecured loan from the issuer, MMC Finance DAC, an Ireland-based limited liability company established for this sole purpose.

The noteholders will rely solely on Norilsk Nickel's credit and financial standing for the payment of obligations under the notes, Fitch said.

The proceeds will be used for general corporate purposes and capital investments, the agency said.

The company's performance in 2016 was relatively resilient despite the 13% decline in the price of the company's metal basket, including a 19% fall in the average nickel price, Fitch said.

Key rating constraints include Norilsk Nickel's exposure to the base metal demand cycle, as well as legal, business and regulatory risks associated with Russia, the agency said.

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