OREANDA-NEWS. National Rating Agency has affirmed its national scale ‘AA-’ credit rating on Seligdar Gold OJSC. The company’s first-time credit rating of ‘A’ from NRA was assigned on Nov. 10, 2011. Later, the rating was twice upgraded, to ‘A+’ on Oct. 12, 2012 and to ‘AA-’ on Oct. 25, 2013. On Oct 30, 2014, the rating was affirmed at ‘AA-’.

The affirmation reflects Seligdar Gold’s maintained strong position in its market segment and its progress towards the implementation of its production growth and operating costs reduction strategy. NRA views positively the parent group’s ability to maintain a stable financial profile amid the challenging economic conditions. The group’s debt burden is viewed as manageable, considering the satisfactory equity-to-debt and EBITDA-to-debt ratios. The financial strength and liquidity metrics remain within NRA’s ‘AA-’ rating guidelines. Seligdar Gold’s debt maturity profile has improved compared with 2013. The debt consisted primarily of long-term borrowings from a leading Russian bank as of the latest reporting date. The group’s considerable experience in gold mining, strong corporate governance practices and support from strong strategic partners and shareholders are regarded as additional rating strengths.

The dependence of the group’s business and operating performance on gold prices is viewed as a risk. Other weaknesses include the exposure to currency risks that may materially affect the group’s financial performance through its FX-denominated borrowings, but in reality, these risks are offset by revenues from the sales of gold, as the latter’s price is tied to the US dollar.

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