OAO Severstal, Russia’s second-largest steel producer, jumped to a one-month high as Moody’s Investors Service raised the company’s rating to one step below investment grade, citing profitability and “healthy” cash flow.
The stock surged 3 percent to 386.20 rubles by the close in Moscow, the highest price since May 3. Severstal’s $500 million of Eurobonds due 2016 extended gains, cutting the yield by 51 basis points, or 0.51 percentage point, to 6.593 percent. A close at this level is the lowest since May 11, according to data compiled by Bloomberg.
“Today’s rating action reflects continued improvement in Severstal’s operating performance and financial profile, including solid profitability aided by a favorable cost profile and healthy cash flow generation,” Moody’s analysts led by Steven Oman said in an e-mailed note.
Moody’s lifted Severstal to Ba1 from Ba2, according to the statement.