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19.11.2007
Credit-Rating: Skvyra Grain Company`s upcoming bond issue assigned uaB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB+ (uaB plus) to UAH5m 5-year registered coupon bonds (A series) to be issued by Kiev Oblast-based Skvyra Grain Company LLC (`Issuer` or `company`). The company`s primary activity is grain processing and packaging. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2006 and 1H2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaB credit rating is characterized with the LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is extremely susceptible to 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 rating
- The Issuer is incorporated with the group, which has a 6-year experience in the Ukrainian grain market and produces goods under well-known trade marks gaining 1 per cent of the overall grain production.
- The issue is underwritten by Krupyanoy Dom LLC, which is the group`s principal participant with its net sales having grown to UAH25m from UAH8.2m over 2002-2006.
Factors constraining the credit rating
- The issue size of UAH5m exceeds over 5x the Issuer`s equity of UAH981.5K and 3.3x exceeds the Issuer`s plus underwriter`s equity of UAH1.5m as of Jul.1, 2007.
- Issuer`s and underwriter`s negative result in 2006, in which Issuer`s plus underwriter`s net loss accounted for UAH0.9m.
- The issue servicing and redemption is contingent upon successful implementation of the project aimed at buckwheat production. This project, however, is being implemented in the environment of growing competition and absence of resource basis.
- The group`s performance is dependant upon crop capacity and climate conditions, and is vulnerable to seasonality and regulatory influence over the industry the group operates in.
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
