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30.12.2008
Credit-Rating downgrades TK Intermarket LLC`s bonds to uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBB from uaBBB the long-term credit rating assigned to registered coupon bonds (series D-E) issued by Lviv-based Intermarket Trading Company LLC (`issuer` or `company`). The amount of the issue is UAH50m, with 3-year original maturity. The rating outlook has been changed to stable. The company`s principal activity is wholesale and retail trade with foodstuffs and non-foods. To revise the rating Credit-Rating considered issuer`s financial statements for 3Q and 9M2008 and its other inside information.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
- The issuer has leading positions in the retail sector in western Ukraine embracing 7 supermarkets of Arsen chain and 1 wholesale base Intermarket.
- A number of issuer`s key figures grew during the past few year, in fact the net sales earnings increased by 33% over 9M2008 in comparison with year-earlier similar period and amounted to UAH685.6m; the operating profit advanced to UAH30.1m (compared with UAH7.6m recorded for 9M2007).
Factors constraining the credit rating
- Issuer`s detrimental performance in 2006-2007 and 9M2008.
- Issuer`s significant debt burden accompanied by large share of short-term obligations under limited lending and opacity concerning refinancing of issuer`s liabilities under volatile market environment.
- A significant share of foreign currency-denominated liabilities in company`s loan portfolio (62.3%), which may lead to rise in issuer`s debt burden under devaluation of the national currency.
- Rising competition in the sector of foodstuff retailing under decreasing population`s incomes.
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 analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
