Moody’s sets Russia’s Mechel default rating at limited default

LONDON, Dec 16 (PRIME) -- International ratings agency Moody’s Investors Service has awarded Russian metals and mining group Mechel a limited default rating of its probability default rating, the agency said in a statement late Monday.

"Our decision to assign a limited default designation to Mechel's PDR, follows the company's announcement that it had suspended principal and cut interest payments on its debt obligations in the third quarter," the agency quoted Denis Perevezentsev, a Moody's Vice President, senior analyst and lead analyst for the issuer, as saying.

"The Arbitrage Court of Moscow's recent ruling, which acknowledged interest payment default by Mechel on at least one of its credit facilities, confirms the company's statement."

No other changes to Mechel’s ratings have been made.

As of December 1, Mechel’s net debt stood at U.S. $6.97 billion, with state-owned banks Gazprombank, Sberbank and VTB accounting for 68% of the debt. The company has been in restructuring talks with the banks for several months now, but has not yet reached any agreement.

End