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17.07.2007
Bond issue by Reardi 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 UAH30m 3-year issue of registered coupon bonds (A, B series) by Dnepropetrovsk-based Reardi Private Company (Issuer or company). The company's primary activity is operating the supermarket chain in Central and Southern Ukraine. In the course of analysis Credit-Rating considered Issuer's financial statements for 2004-2006 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 is involved in retail trade (by operating Bolshaya Lozhka (Big Spoon) supermarket chain), which has rapidly been growing over the past few years with such a trend being expected to be retained;
- Growth in Issuer's key performance indicators during 2004-2006, specifically company's assets rose 16x to UAH119.8m with the net sales having grown 48x to UAH264.6m;
- Issuer's network has grown to 14 from 2 outlets during 2005-2006 (with 7 of them being own) coupled with increased efficiency in utilization of commercial premises, in fact the monthly average gains from 1 sq.m. accounted for USD676 compared to USD589 of the year earlier.
Factors constraining the credit rating:
- Issuer's modest financial strength indicators (the financial independence ratio accounted for 0.026 as of Jan. 1, 2007;
- Issuer's poor profitability, which amounted to 0.9% in 2006 with the net profit having amounted to UAH1.9m;
- Growing competition on the retail market of Ukraine;
- High volume of credit operations with the associated companies.
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
