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16.07.2007
Upcoming bond issue by RUSH assigned uaBB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB long-term credit rating to upcoming UAH50m 3-year issue of registered coupon bonds (B series) by Dnepropetrovsk-based RUSH LLC (Issuer or company). The companys primary activity is retail trade of perfume and cosmetics products. In the course of analysis Credit-Rating considered Issuers financial statements for 2003-1Q2007 as well as other inside information furnished by the company.
A credit rating of uaBB is a speculative grade rating, indicating a debt liability that is the LEAST AFFECTED BY THE RISK OF NONPAYMENT of the principal and interest among speculative grade ratings. This rating indicates that the obligor may not be able to meet in full its commitments on the given debt liability on a timely basis in the event of adverse changes in the business, financial or economic conditions in the Ukrainian financial market environment. However, the possibility of nonpayment in the near future is considered to be low.
Factors maintaining the credit rating:
- The Issuer operates on the growing retail market of perfume and cosmetics products which upward trend in development is expected to be retained in future, with the Issuer being one of the leading companies on the markets of Dnepropetrovsk region, of cities of Donetsk and Zaporozhye.
- Issuers key performance indicators have been growing during 2003-2006, specifically the assets grew 16.7x to UAH130.2m with the net sales gains having increased 9.7x to UAH275.4m.
- High expansion rates of Issuers outlet network during the entire Issuers term of operation, in fact 2006-1Q2007 saw increase in number of outlets to 91 from 40.
Factors constraining the credit rating:
- The Issuer is planning to raise 3.7x the net sales profit in 2007-2010, yet the market growth is expected at 40-60%.
- High competition on the perfume and cosmetics market, which is expected to get more severe.
- The planned interest payments of UAH10.9m on A and B series exceed Issuers 2006 EBITDA of UAH9.6m, albeit, it accounts for 84% of the forecast 2007 EBITDA of UAH13m.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in REUTERS, BLOOMBERG and FTN MONITOR information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
