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07.08.2007
Upcoming bond issue by Mist Ekspress LLC assigned uaBB+ credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB+ (uaBB plus) long-term credit rating to the upcoming UAH25m 3-year issue of registered coupon bonds (A series) by Lviv-based Mist Ekspress LLC (`Issuer` or `company`). The company`s primary activity is shipping and delivering cargos and small-size parcels within the territory of Ukraine. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2006 and 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.
The plus (+) or minus (-) modifier denotes rating`s relative status within major categories .
Factors maintaining the credit rating
- Issuer`s debt obligation is underwritten by Rosan SP LLC, which is one of the Issuer`s founders and which is associated with the legally informal group of companies; the Issuer`s and underwriter`s consolidated capital of UAH35.9m exceeds 1.44x the size of the upcoming issue.
- The market of automotive cargo transportation has grown over 2006, in fact the cargo turnover of automotive shipping companies in Ukraine amounted to 25.3bn tons/km, which is 23.8% higher than in 2005; and that during January-April 2007 was 8.3bn tons/km, which is 19.9% higher than in January-April 2006; gains from courier activities in 2006 amounted to UAH177.9m, with those during 1Q2007 being UAH64.9m, which is 26.3% higher than in January-April 2006.
- Issuer`s developed branch network of 30 outlets, in fact the Issuer has representative offices in all oblast centres of Ukraine.
Factors constraining the credit rating
- Issuer`s insignificant period of operation as an independent legal entity (since Jan. 5, 2007) coupled with its detrimental performance, specifically the Issuer`s uncovered loss amounted to UAH(-)1.3m
- Issuer`s ambitious expansion plans, in fact the planned investments of UAH80+ for 2007-2010 will increase Issuer`s debt burden.
- High concentration on the Ukrainian shipping market.
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
