Gerdau S.A. -- Moody's: Operating environment underpins ratings of Severstal and Gerdau

London, 19 November 2015 -- Russian integrated steelmaking and mining company PAO Severstal's (Ba1 negative) significantly lower leverage and much higher profitability give it a stronger financial profile than its Brazilian investment-grade peer Gerdau S.A. (Baa3 negative), Moody's Investors Service has said today. However, Brazil (Baa3 stable), the domestic market of Gerdau, has a lower operating environment risk, higher institutional strength and is less susceptible to event risk than Russia (Ba1 negative), Severstal's base of operations. Although the more favourable operating environment, with lower risks, underpins Gerdau's higher rating relative to Severstal's, Gerdau's Brazilian operations continue to struggle with the tough market conditions. Moreover, we expect Brazil's recession to be fairly similar in size to Russia's with the South American country's GDP shrinking 3% in 2015 and 2% in 2016 vs a 4% contraction in Russia in 2015 and 1% in 2016.

Vollständigen Artikel bei Moodys lesen