Fitch Affirms Norilsk Nickel At 'BBB-'; Outlook Stable

Fitch Ratings affirmed Russia-based OJSC MMC Norilsk Nickel's Long-term Issuer Default Rating ("IDR") and senior unsecured ratings at 'BBB-' (BBB minus) and its Short-term IDR at 'F3'. The Outlook for the Long-term IDR is Stable.

The ratings reflect NN's position as the world's leading producer of nickel and palladium, as well as being a significant producer of copper and platinum. The company's market positions are underpinned by the strong operating profile of its core assets on the Taimyr Peninsula in Northern Russia which benefit from low operating costs, a uniquely rich ore body and long-life reserves. Fitch notes that Norilsk Nickel's core Russian assets are located in remote areas characterised by permafrost conditions, which presents certain logistical and transportation challenges. The agency does, however, recognise Norilsk Nickel's long track record of maintaining consistent production under these conditions.

Norilsk Nickel's overall corporate governance profile is regarded as above average, relative to its Russian peer group. Positive factors include strong levels of information disclosure, high free float of shares and good independent director representation on its board.

The Stable Outlook reflects Fitch's expectation that Norilsk Nickel's scale, commodity diversification and low operating cost position will enable it to maintain an appropriate financial profile for the current rating category despite an expected moderation in commodity prices over the next one to three years.