RUSAL stock rises 6 pct on favourable bank coverage

* Banks initiate coverage with positive ratings

* Hong Kong stock down 21 pct from IPO level

* Target prices either side of IPO level

By Polina Devitt

MOSCOW, March 4 (Reuters) - Hong Kong-traded shares in RUSAL  rose 6.2 percent on Thursday on a quartet of favourable recommendations from the first four banks to value the world's largest aluminium producer after its January IPO.

Two of the four banks, however, put a value on the stock below the HK$10.80 at which the landmark IPO -- crucial to paying down the Russian company's multi-billion-dollar debt -- was launched.

RUSAL, whose largest shareholder is Russian billionaire Oleg Deripaska, has lost 21 percent of its value since floating about 10 percent of its stock in late January, raising $2.2 billion to help pay down debt incurred prior to the financial crisis.

The company is the first company not headquartered in Asia to list in Hong Kong. Its shares closed at HK$8.51 on Thursday.

Credit Suisse, global coordinator of the IPO, initiated coverage of RUSAL with an "outperform" rating. Its target price of HK$11.4 was 5.6 percent above the IPO price.

"There are many uncertainties about RUSAL, yet the ultimate driver remains the aluminium price, which affects RUSAL's bottom line as well as its ability to meet its debt repayment target and financial covenants during the debt restructuring period," Credit Suisse said in a note.

Aluminium , used in packaging, cars and construction, was forecast in a Reuters poll to average $2,094 a tonne in 2010 and $2,226 next year versus $1,671 a tonne in 2009. The metal is trading at around $2,200 a tonne.

BOC International, underwriter of the IPO, initiated coverage of RUSAL with a "buy" rating and said a fair price for the stock would be HK$11.03.

The bank said steady global aluminium prices and a low global interest rate environment were key to its rating. Economic and political change and a possible collapse in aluminium prices were the main risks, it said.

Bank of America Merrill Lynch and Liberum Capital recommended investors buy the stock and gave fair-value prices of HK$10.0 and HK$10.3 respectively.

RUSAL's Paris-listed GDRs  closed up 0.80 euros at 15.75 euros.

(Editing by David Holmes)