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09.04.2008
Credit-Rating upgrades Agro-Soyuz`s bond issue to uaBB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it upgraded to uaBB+ (uaBB plus) from uaBB the long-term credit rating assigned to registered coupon bonds (series A) issued by Dnepropetrovsk-based Manufacturing Enterprise Agro-Soyuz LLC (`Issuer` or `company`). The amount of the issue is UAH10m, with 3-year original maturity. The outlook on the rating has been revised to stable. The company`s principal activity is manufacturing of agricultural machinery and equipment. To revise the rating the agency considered Issuer`s financial statements for 4Q and full 2007 as well as its other inside information.
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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Stable outlook indicates that there are no anticipated reasons to change rating in the course of the year.
Factors maintaining the credit rating
- The company`s goods turnover grew 1.8x to UAH297.1m in 2007, which is 82.7 percent higher than that of 2006, with the net profit advanced 19.2x to UAH9.7m as compared to 2006.
- Enhanced Issuer`s performance: the sales profitability made up 3.3 percent in 2007 (0.3 percent in 2006), the EBITDA profitability made up 6.2 percent (2.5 percent in 2006), the EBITDA increased to UAH18.4m and exceeded 4.12x the overall interest payments on loans and bonds (with that indicator making up 1.35x in 2006); the net working capital in 2007 made up UAH20.6m (UAH13.2m in 2006).
Factors constraining the credit rating
- Issuer`s high debt burden in 2007 and its expected increase envisaged by Issuer`s development strategy in 2008.
- Risks imposed by possible shrink in paying capacity in Ukraine`s agricultural machinery market due to rise in prices and lack of free cash in agricultural companies.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
