S&P upgrades Russias Norilsk Nickel to BBB

S&P upgrades Russias Norilsk Nickel to BBB

Wednesday, August 9th 2006

International rating agency Standard & Poor’s said Tuesday it had upgraded its long-term corporate rating for Russian metals producer Norilsk Nickel [RTS: GMK] from BB+ to ã‚ã‚ã‚- on the company’s improved performance.

The agency also affirmed the company’s Russia national scale rating at ruAA+. The outlook on the ratings is stable.

S&P credit analyst Elena Anankina said, “The rating actions recognize Norilsk’s impressive business performance, prudent financial policy that has resulted in a low debt level, and track record of successfully dealing with the risks of operating in Russia.”

Despite the institutional risks on the domestic market, the company is in a strong position due to its reliance on exports, “autonomy in infrastructure needs,” and its “position as the largest employer and taxpayer in the regions where it operates,” the agency said.

The agency also noted the strategic importance of Norilsk Nickel to Russia as a whole.

“Standard & Poor’s expects Norilsk to continue to demonstrate a consistent track record of prudent financial policy and benign relations with government authorities, including through the next parliamentary and presidential elections scheduled for 2007-2008,” S&P said.

“Rating upside is currently constrained by the risks of operating in Russia… Rating downside might result from very large debt-financed acquisitions or unanticipated major company-specific sovereign pressure,” the agency said.

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