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14.08.2008
Credit-Rating assigns Proviant LLC`s upcoming bond issue uaB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine, has today assigned a long-term credit rating of uaB+ to UAH25m 5-year upcoming registered interest-bearing bonds (A series) to be issued by Chernigov-based Proviant LLC (`Issuer` or `Company`). The company`s principal activity is production and sale of agricultural products. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2007 and 1Q2008 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Factors maintaining the credit rating:
- Availability of guarantee from the side of Ichnyanskiy Milk Cannery Plant OJSC, being the main production enterprise of Group of Companies Proviant;
- Growth of Group of Companies Proviant, headed by the Issuer, at the market of condensed milk, produced and sold under the trade mark ICHNYA (in 2007 4% of the market).
Factors constraining the credit rating:
- Issue of bonds (UAH25m) more than 8 times exceeds EBITDA index consolidated with the Guarantor (UAH3.1m) as the result of 2007;
- Direct dependence of the timely redemption of liabilities under the bonds on the success of carrying out investment projects ;
- Aggressive strategy of development of Proviant Group of Companies, stipulating significant increase of production volumes and debt loading volumes .
- Almost all property of the Issuer and the Guarantor is pledged on bank loans;
- Unstable indices of financial and economic activity.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG Information Systems.
For further information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
