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Company Profile: EVRAZ Corporate Rating-B+/Stable Evraz is one of Russia's largest and the world's 20 largest steel producers.

In 2013 the company produced 16.1 million ton (mt) of crude steel and 15.9 mt of steel products. Evraz's main assets are in Russia, but also in Ukraine, Czech Republic, Italy, the United States, Canada and South Africa. Evraz PLC, the 100% owner of Evraz, is listed on the London stock exchange. Lanebrook Ltd., an investment vehicle controlled by Roman Abramovich, Alexander Abramov, Alexander Frolov, and Eugene Shvidler, and its affiliated companies, own 66.4% of Evraz PLC. Evraz also holds a 50% stake in Corber Enterprises Ltd., that in turn holds 82% in Raspadskaya, Russia's largest coal producer. Parent company Evraz PLC holds the other 50% in Corber. Evraz PLC also holds 51% in the Timir iron ore project and 100% in the Megegey coking coal project. Business Profile: Evraz has Fair business risk profile, reflecting low-cost steel operation and vertical integration into mining, offset by cyclicality of steel sector and significant country risk of Russia. Evraz is a low cost producer in the cyclical and capital-intensive global steel industry. Its competitive advantage is based on vertical integration in iron ore and coal as well as generally lower costs in Russia, which we take into account in our assessment of its business risk. The company also benefits from some geographic diversification, with 15%-20% of EBITDA generated outside of Russia and diversity of export markets. Evraz's business risk profile is also supported by its leading domestic market position, especially in long steel products. The business risk profile is constrained, however, by exposure to high country risk in Russia, where Evraz generates 40%-45% of its Revenues and 85%-90% of its EBITDA, and the company's direct and indirect exposure to the weak European market. Although Europe represents only 10% of company sales, we believe that weak demand and margins there are constraining profitability in Commonwealth of Independent States markets, including Russia, which contributes 42% of company sales in 2012. The cost profile of Evraz's iron ore operations is also high, with a cash cost of $78 per ton in 2012. We also foresee increasing competition in the Russian long steel market once the new mini-mills are commissioned by NLMK and Severstal in 2013-2014. Financial Profile: Evraz has Aggressive financial risk profile, reflecting our expectation that leverage will increase in FY13. Expected ratio of debt to EBITDA is above 4x in FY13. We also take into account substantial absolute debt amounts, with large debt maturities in FY13 and FY14. We view Evraz's financial policy as aggressive. Still, we view positively Evraz's track record of debt reduction over the past several years, with the conversion of its convertible bond into equity in 2011, and the recent largely equity-financed acquisition of 50% of Corber. The company's increasing reliance on long-term funding, and the ensuing

improvement in its debt maturity profile are key supports. We also factor in our expectation that Evraz's free operating cash flow (FOCF) will remain broadly neutral and debt will not increase. We factor into the rating that Evraz will continue to control the major operating assets of the Evraz group and remain a core subsidiary of Evraz PLC. We expect that Evraz PLC's leverage and overall credit quality will not deviate substantially from that of Evraz. Liquidity: We expect Evraz to maintain Adequate liquidity, reflecting consistent positive cash generation and modest cash balances. Although the company has less headroom at the current level is limited. Evraz has cash and short term investments of $1537 million and $950 million structured credit facility as of June 30, 2013. We expected FFO of about $1.2 billion and Capex of about $.9 billion in FY13. Debt maturity schedule table:

The company has $1.45 billion of short-term maturities. However, some of these maturities are under uncommitted trade finance revolving lines, which management plans to routinely roll over. Outlook: Stable The stable outlook on Russia-based steel producer Evraz Group S.A. reflects Standard & Poor's Ratings Services' opinion that the company's credit metrics in 2013-2014 will remain at levels in line with the rating. In particular, under our base-case scenario we think that Standard & Poor's fully adjusted funds from operations (FFO)-to-debt ratio for Evraz will be about 15%. We also factor in our assumption that management will maintain its prudent approach to liquidity. Headroom at the current rating level is limited. Downside scenario We would consider lowering the rating if industry conditions deteriorated more than we currently anticipate, the FFO-to-debt ratio fell markedly below 15% without near-term prospects of recovery. Negative free operating cash flow generation could also lead to a downgrade.

Upside scenario Weak industry conditions in the steel industry limit near-term upside rating potential. We would consider raising the rating if the macroeconomic and industry environment improved substantially and the company was able to demonstrate a fully adjusted FFO-to-debt ratio of 20%-%-25% on a sustainable basis.