OJSC Magnitogorsk Iron and Steel Works (MMK or the Company) announces that Moody's Investors Service has upgraded the Company’s corporate family rating to Ba1 from Ba2 and probability of default rating to Ba1-PD from Ba2-PD.

The assigned rating corresponds with the sovereign rating of Russia and brings MMK to the club of Russia’s metals & mining majors – Severstal, NLMK and Norilsk Nickel whose ratings were confirmed by Moody’s at the previous level.

The upgrade of MMK’s rating reflects Moody’s expectation that the company’s financial metrics will remain robust as it proceeds with debt reduction plans and the Company will maintain its strong operating performance, high profitability, positive free cash flow generation and solid liquidity.

In its press release Moody’s notes that MMK’s rating reflects the company’s robust financial metrics and sustainable positive free cash flow generation, low-cost position and high profitability, conservative financial policy, diversified product mix and strong market share for high value-added flat steel products in Russia, substantial share of export sales and strong competitiveness in international markets thanks to its positioning at the very beginning of the global cost curve, and solid liquidity.

According to Moody’s the rating also considers MMK’s limited integration in mining operations, with only 25% self-sufficiency in iron ore and 40% in coking coal by capacity.

The negative outlook is in line with the outlook for Russia’s sovereign rating.

MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia include a large steel-producing complex encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2015, the company produced 12.2 million tonnes of crude steel and 11.2 million tonnes of commercial steel products. MMK Group had sales in 2015 of USD 5,839 million and EBITDA of USD 1,668 million.

Investor Relations Department:
Andrey Serov, Head of IR
tel.: +7 (3519) 24-52-97
E-mail: serov.ae@mmk.ru

Communications Department:
Sergei Vykhukholev
tel.: +7 (499) 238-26-13
E-mail: vykhukholev.sv@mmk.ru
Dmitry Kuchumov
tel.: +7 (499) 238-26-13
E-mail: kuchumov.do@mmk.ru