OREANDA-NEWS. On September 04, 2008 Moody's Investors Service has upgraded Azovstal's corporate family rating and the rating of the loan participation notes issued by Azovstal to B1 from B2 and B3 respectively. The outlook for the ratings is positive. The Service revealed this information in an official statement, reported the press-centre of Metinvest Group.

The rating action was prompted by the improved transparency of Azovstal's role within the enlarged Metinvest Group. Moody's also took into consideration the improved profitability and reduced leverage of Azovstal stemming from better prices achieved for the steel products manufactured at Azovstal. Ongoing extensive modernization of the steel plant to ensure higher effectiveness is another important factor.

The Investor Service decided to improve the rating of Azovstal's Eurobonds by two grades from B3 to B1 jumping over B2 since the amount of secured debt at Azovstal level has been reduced significantly and corporate governance transparency increased after the plant was integrated into Metinvest Group.

"The rating and outlook upgrade to B1- /positive/ confirms validity of our projections and shows that Azovstal is a financially stable and investment-attractive enterprise, and fulfils all its obligations to partners and investors fully and on time”, said Sergey Novikov CFO of Metinvest Holding. “Also, the upgrade proves that the plant has been effectively integrated into the Metinvest Group structure that has a transparent holding system of corporate governance meeting global standards".

The last rating action for Azovstal took place in September 2007. The Moody's retained B2 level then but changed the outlook to "developing" to reflect the increased uncertainty from the creation of the topholding company Metinvest at the time.