OREANDA-NEWS. National Rating Agency has raised its national scale credit rating on Ashinsky Metal Works OJSC (AMW) to 'A-'.

The rating upgrade is driven by the group's positive 1H 2014 financial result according to IFRS, growing revenue, significantlyreduced prime costs, positive and increasing operating margin, strong balance sheet liquidity ratios and comfortable debt maturityprofile. AMW has a long track record of successful operations, while the modernization and enhancement of its production assetsstrengthens its competitiveness. As a domestic market-oriented company, AMW benefits from the ruble depreciation, which improves the price competitiveness of Russian steel makers in the export markets and weakens the local market competition. In addition, the market capitalization of AMW, traded on the Moscow Exchange, increased by 77.4% in 2014.

The rating is constrained by the company's high debt leverage and the fact that its current debt structure is dominated by the foreign exchange-denominated component, which significantly increased in 2H 2014 in ruble terms, while the foreign exchange revenue growth remained modest. This makes AMW highly sensitive to the forex market volatility.