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11.08.2009
Credit-Rating downgrades City.com LLC`s bonds to uaB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaB from uaBB the long-term credit rating assigned to registered coupon bonds (series A) issued by Kiev-based City.com LLC (`issuer` or `company`). The amount of the issue is UAH50m, with 5-year original maturity. The outlook on the rating is negative. The rating remains on Rating Watch List. The company`s principal activity is retailing with information and communication technologies via cash&carry supermarket chain. In the course of analysis Credit-Rating considered issuer`s financial statements for 2H2008 and full 2008 and its other inside information.
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.
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.
The Rating Watch List is intended to inform financial market participants about possible changes of ratings in short-term prospective. The rating placed on RWL denotes that Credit-Rating is currently considering its change as a result of events or ongoing trends, which may negatively affect creditworthiness of a rating`s bearer.
Factors maintaining the credit rating
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The issuer is associated with Unitrade Group, which enjoys significant experience in Ukraine`s IT sector.
Factors constraining the credit rating
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An institution of legal proceedings on recovery of proprietary rights, which considerably hampers issuer`s meeting its obligations.
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The issuer`s debt burden: as at Dec. 31, 2008 the ratio of net debt to EBITDA calculated for the past 12 months was 3.16 times, coupled with high specific gravity of short-term obligations in the overall issuer`s obligations on bank loans.
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Growing competition in the segment of retailing under shrinking population`s earnings.
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 +38044490 25 50
SRozumyak@credit-rating.ua
Denis Rudenko
DRudenko@credit-rating.ua
