S&P rates Novolipetsk Steel bond BBB-

Standard & Poor's said it assigned a BBB- senior unsecured debt rating to the proposed RUB 10 billion three-year bond to be issued by OJSC Novolipetsk Steel.

Proceeds will be used to refinance short-term debt.

S&P said that it equalized the bond rating with the long-term corporate credit rating because the company's secured debt is relatively low and bondholders will not be materially disadvantaged relative to holders of existing senior secured and unsecured debt.

The company's business risk profile benefits from its superior cost position, partial vertical integration and good diversity of export markets, the agency said.

The business risk profile is constrained by its concentrated asset base, severe downturn in the global steel sector and country risks in the Russian Federation (foreign currency BBB/negative/A-3; local currency BBB+/negative/A-2; Russia national scale ruAAA), the agency noted.

NLMK's intermediate financial profile is underpinned by a strong balance sheet, commitment to a conservative financial policy and comfortable liquidity, S&P said.

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