Research Update: Russian Steel Producer OJSC NLMK 'BBB-' Rating Affirmed On Agreement To Buy Additional 50% Stake In SIF; Outlook Stable Apr 11

Standard & Poors, April 2011

Abstract
Russian steel producer OJSC NLMK has announced its acquisition, for $600 million, of an additional 50% stake in Steel Invest and Finance (SIF), making NLMK the 100% owner of all rolling assets of its joint venture with Switzerland's Duferco. We think the transaction will likely add $1.5 billion to NLMK's adjusted debt and be moderately positive for its business risk profile. We believe that despite its higher debt, NLMK will successfully maintain healthy credit metrics. We are affirming our 'BBB-' long-term rating on NLMK. The stable outlook reflects our view that NLMK's fully adjusted ratio of funds from operations to debt will be about 50% at year-end 2011 and then improve to 60% in 2012-2013. On April 26, 2011, Standard...

Companies mentioned in this report are:
- OJSC NLMK

Action: Affirmed
Action: Outlook: Stable

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

- OJSC NLMK

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