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12.09.2008
Credit-Rating assigns Energomashspetsstal 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- (uaBB minus) to registered coupon bonds (series A) to be issued by Kramatorsk-based Energomashspetsstal OJSC (`issuer` or `company`). The amount of the issue is to be UAH350m, with 5-year original maturity. The company`s principal activity is production of electric steel, mouldings, forging, and ingots. In the course of analysis Credit-Rating considered issuer`s financial statements for 2002-2007 and 1H2008 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).
Factors maintaining the credit rating
- Issuer`s stable positions in the domestic market.
- The issuer`s production output has been stably growing over the past few years, in fact the steel output rose by 10% to 107.3K metric tons in 2007.
Factors constraining the credit rating
- Issuer`s low performance indicators in the past few years, in fact in 2006-2007 the issuer`s operating activities were detrimental, with the cash flow from operating activities having negative trend in 2002-2007.
- Issuer`s significant debt burden, which tends to growth, with the issuer`s property being pledged for loans (specifically, the issuer`s net debt recorded in 2007 exceeded 7x the EBITDA; the size of the upcoming bond issue exceeds 3.6x the EBITDA indicator).
- Cyclicality and high capital capacity of the industry.
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
