International rating agency Fitch has upgraded the long-term issuer default rating of Russian uncut diamond mining giant Alrosa to BB+ from BB with a stable outlook and affirmed the company’s short-term issuer default rating at B, the agency said in a research note.
“The upgrade reflects Fitch’s expectations that Alrosa will maintain funds from operations (FFO) gross adjusted leverage at a conservative level at or below 2.0x on a sustained basis, as already seen at end of 2015 and January-June 2016, which was our previous positive rating guidance”, the agency said.
“This is a result of Alrosa’s outperformance of our conservative expectations over the past few years, driven by a weaker ruble and higher than expected diamond pricing, which allowed Alrosa’s leverage to rebase at 1.0x-1.3x for the rating horizon from above 2.0x before 2015”.
“The ratings also reflect Alrosa’s strong operating profile as the largest diamond producer (30% global diamond production share in 2015), and its cost leadership”, Fitch added. (Prime/Business World Magazine)
