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Moody's upgrades ALROSA to Ba1, affirms ratings of Metalloinvest, SUEK, Nord Gold


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Moody's upgrades ALROSA to Ba1, affirms ratings of Metalloinvest, SUEK, Nord Gold

Moody's has upgraded Russian diamond mining company 's credit ratings on theback of a "strengthened business and financial profile," according toan April 27 statement.

The corporate family rating has been bumped up to Ba1 from Ba2and the probability of default rating has been upgraded to Ba1-PD from Ba2-PD. However,the outlook on these ratings is negative.

Moody's said it raised ALROSA's credit ratings because the company'sfinancial metrics have remained strong versus its global peers.

The rating agency expects ALROSA's financial metrics will remainrobust as a result of the company's status as a major producer and exporter of diamondsand the weak ruble, its 29% share in global diamond output, its low-cost reservebase, technical mining expertise, solid liquidity and conservative financial policy.

According to Moody's, the re-rating also factors in the volatiledemand and prices for diamonds and the company's exposure to the Russian macroeconomicenvironment, despite high exports, given that its operating facilities are locatedin Russia.

The negative outlook for ALROSA is in line with the negativeoutlook for the sovereign rating and reflects the fact that a potential downgradeof Russia's sovereign rating may result in the lowering of Russia's foreign-currencybond country ceiling.

Moody's said this would result in a downgrade of ALROSA's ratings.

While there is no immediate positive pressure on ALROSA's ratings,Moody's may upgrade the company if Russia's sovereign rating is upgraded and thediamond market stabilizes.

At the same time that Moody's upgraded ALROSA's credit ratings,it confirmed the Ba2 corporate family rating and Ba2-PD probability of default ratingsof Russian steelmaker OAO HoldingCo. METALLOINVEST and the Ba3 corporate family ratings and Ba3-PD probabilityof default ratings of Russian coal producer SUEKplc and Netherlands-based NordGold NV

The outlook is stable on Metalloinvest's and SUEK's ratings,and positive on Nord Gold's ratings.