OREANDA-NEWS. Fitch Ratings has today affirmed Luxembourg-based Evraz Group SA's ("Evraz") Issuer Default and senior unsecured ratings at 'BB' and its Short-term rating at 'B'.

The affirmation follows the announcement that the company plans to acquire the US-based steel maker Oregon Steel Mills, Inc. for USD2.3 billion.

At the same time, Fitch has affirmed the ratings of Mastercroft Limited - Evraz's core subsidiary with most of its assets concentrated in Russia - at Issuer Default 'BB' and Short-term 'B'. Evraz Securities SA's ("ES") senior unsecured rating is affirmed at 'BB'. The Outlooks on the Issuer Default ratings ("IDRs") are Stable.
 
The acquisition will be financed by USD500 million cash and USD1.8bn new debt. The additional debt will not have a material negative impact on Evraz's credit metrics. Assuming that the actual acquisition will take place in 2006, Fitch expects net debt/EBITDA ratio of the consolidated entity on a pro forma basis to reach 1.55x, which is roughly in line with the net debt/EBITDA of 1.5x ceiling set by the company. Both Evraz and Oregon Steel Mills are profitable and have moderate credit profiles.