Standard & Poor's confirm rating of Polyus Gold International Limited at the level of “BB+”, forecast is “negative”

On May 22, 2015, Ratings Services Standard & Poor's confirmed the corporate credit rating of the Russian gold miner Polyus Gold International Limited (Polyus Gold) at the level “BB +”. The outlook remains "negative".

In addition, we confirmed the rating of “BB +” of the Polyus Gold’s unsecured bonds issue in the volume of $750 million, and the rating of expected level of debt payment after the default "3" that reflects our expectation of "significant" level (upper segment of the 50-70% range) of the debt repayment in the case of default.

Taking into account the positive effect of the ruble depreciation and the reduction of capital expenditure (as compared to previous years), we expect that the ability of Polyus Zolot to generate cash flow will increase, which, in our opinion, will determine the improvement in the company's own creditworthiness. However, the expected improvement didn’t lead to a positive rating action, as the Polyus Zoloto’s ratings  are still limited by assessment of risk of transfer and convertibility for Russian non-sovereign borrowers (BB +), as the company currently doesn’t export products and therefore doesn’t have guaranteed stable incomes in hard currency.