Fitch upgrades rating of Russia’s ALROSA to BB+, outlook stable

MOSCOW, Oct 12 (PRIME) -- 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 Wednesday.

“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-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.

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