CIS Credit Monitor: Raspadskaya

Raspadskaya (NR/B1/B+): operations improving and debt well-contained

Raspadskaya Mine yesterday published H1 2009 IFRS results. The company is feeling heavy pressure on operating results and posted a net loss. At the same time the leverage remains low and its cash cushion sufficient for short-term debt repayments. CAPEX was maintained at a low level and was almost covered by free operating cash flow. We believe that the financial situation of Raspadskaya still remains much more comfortable than Evraz and Severstal which by the year-end will most likely be in breach of financial covenants. We retain our positive view on the Raspadskaya 2012 eurobond.