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08.08.2007
Upcoming bond issue by Yasinovatskiy Machine Building Plant assigned uaBBB+ credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB+ (uaBBB plus) long-term credit rating to USD5m 2-year bonds by Donetsk Oblast-based Yasinovatskiy Machine Building Plant OJSC (`Issuer` or `company`). The company`s primary activity is manufacturing the heading machines and other mining equipment. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2006 as well as other inside information furnished by the company.
A credit rating of uaBBB is an investment grade rating, indicating an
ADEQUATE CAPACITY of an obligor to pay both interest and principal on the given debt
liability in the Ukrainian financial market environment. This rating indicates a level of
creditworthiness that is more susceptible to adverse changes in commercial, financial and
economic conditions than debt obligations with higher investment grade ratings.
The plus (+) or minus (-) modifier denotes rating`s relative status within major
categories.
Factors maintaining the credit rating:
- The Issuer is a monopolist in the niche of manufacturing heading machines of middle class in Ukraine, being one of the biggest manufacturers in the CIS (Commonwealth of Independent States) market, which has been growing over the past few years and this growth tendency is expected to be retained.
- High Issuer`s indicators of liquidity and of financial strength during the period under study, specifically the following Issuer`s ratios as of Jan 1, 2007 made up 1.99 of total liquidity, 1.39 of quick, 0.41 of absolute liquidity, with the financial independence ratio being 0.73.
- The size of Issuer`s undistributed profit as of Jan.1, 2007 exceeded 3.2x the issue size.
Factors constraining the credit rating:
- The Issuer has a restrained market coupled with company`s dependency upon state financing the national coal mining industry and regulation of export operations.
- Decline in Issuer`s 2006 key figures, specifically the net sales fell 16.3% to
UAH126.5m, with the net profit dropping 36%
to UAH14.7m. The operating cash flow was negative in this period.
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
