Fitch Ratings on Oct. 11 revised its outlook on Polyus Gold International Ltd.'s long-term issuer default rating to positive from negative, while affirming it at BB-.
The rating agency also affirmed the short-term issuer default rating at B and the senior unsecured rating of the existing senior unsecured guaranteed notes at BB-.
The outlook revision reflects the rating agency's expectation that the company will maintain a conservative financial profile with no additional share buyback or one-off dividend payments over the next two to three years.
This is supported by the adoption of a recent dividend policy that links the dividend payout percentage to group leverage.
The ratings action is also supported by the company's significant cash balances and commitment to reduce leverage by the year-end.
Net debt levels are expected to remain elevated until 2018, when anticipated production increases from the company's new Natalka mine, as well as increased volumes from some existing mines, will start to have a positive impact on metrics.
Fitch forecasts the company's funds from operations adjusted gross leverage to reduce below 3.0x by 2018, compared with an expected 4.3x as of the end of fiscal 2016.
Additionally, Fitch assigned an expected senior unsecured rating of BB-(EXP) to the company's planned notes issue.
The notes will be guaranteed by JSC Gold Mining Co. Polyus, while proceeds from the offering are expected to be used to repay existing debt maturing in 2017-2018.