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22.04.2008
Credit-Rating assigns Odesaoblenergo OJSC`s upcoming bond issue uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaBB to registered coupon bonds (series A) to be issued by Odessa-based Odesaoblenergo OJSC (`Issuer` or `company`). The amount of the issue is UAH500m, with 5-year original maturity. The company`s principal activity is supply of electrical energy. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2007 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.
Factors maintaining the credit rating
- The Issuer enjoys natural monopoly in the region.
- Issuer`s improved performance (EBITDA profitability made up 10.5% in 2007 as compared to that of 3.8% in 2005) accompanied by adequate level of customers` payments, which have fueled cash flows from operating activities (UAH179m in 2007 as compared to UAH43.4m in 2005).
Factors constraining the credit rating
- Issuer`s dependency upon state regulatory policy, namely tariff policy of National Commission for Energy Regulation.
- Issuer`s significant debt burden: once the bonds have been issued, the consolidated indebtedness on financial liabilities and restructured debt towards Energorynok SC will account for UAH1.3bn, which 8.5x exceeds Issuer`s equity as of Jan.1, 2008.
- Risks, associated with possible changes in Issuer`s ownership structure.
- Risks imposed by redistribution of funds within the legally informal VS Energy International Ukraine group of companies, which incorporates the Issuer.
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
