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24.09.2007
Upcoming bond issue by West-Tobacco-Group assigned uaBB- credit rating
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced the assignment of uaBB- (uaBB minus) long-term credit rating to UAH5m 3-year issue of registered coupon bonds (B series) by Lviv-based West-Tobacco-Group LLC (`Issuer` or `company`). The company`s principal activity is tobacco products trade. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2005-2006 and 1H2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories .
Factors maintaining the credit ratings
- The Issuer is a wholesale distributor of tobacco products in western Ukraine, which was established on basis of the companies with over 10-year experience in this market niche.
- Issuer`s net income rose 11.8% to UAH308.5m in 1H2007 compared to the year earlier UAH599.4m for full year, with the net revenue growing 5x to UAH1,146.9K (UAH381.6K in 2006).
Factors constraining the credit rating
- Issuer`s consolidated liabilities on bank loans and on bonds (including the scheduled placement of B series) 15.9x exceed Issuer`s equity as of July 1, 2007.
- Issuer`s heavy dependency upon producers, which may unilaterally revise the cooperation conditions, and which are few in number, with ЗАО Philipp Morris Ukraine providing up to 45% of supply.
- The tobacco industry of Ukraine is highly vulnerable to the state regulation.
Information on all 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
