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24.06.2005
uaA credit rating assigned to upcoming bond issue of the JSC "Galnaftogaz Concern"
Today, independent rating agency Credit-Rating, Ltd. has awarded a long term “uaA” credit rating to the issuance of registered interest bearing bonds (series D,E,F) of Open Joint Stock Company Galnaftagas in the amount of 90 million UAH for a three-year circulation period. The company’s activities consist of construction and development of gas-filling stations, gas stock tanks and sale of petrol (gas) products.
Positive factors considered while assigning the credit rating:
· The issuer represents the parent company from a group of 10 that deal with the sale of petrol products as well as development of its own gas-filling stations, gas stock tanks in different regions of Ukraine, the group has a 5.3 percent share in the petrol (gas) products market;
· Positive experience in issuance and service of three series of previous bonds that are in circulation;
· The issuer’s diversified liability portfolio (on terms, currencies, instruments, creditors) facilitates preplanned issuance services;
· Debt load from the preplanning issuance (90 million UAH) remains nominal on the issuer;
· Sufficient assets and capital volumes increase for the whole group of companies, consolidated volumes of the letter at the end of 2004 made up 530,798.9 UAH and 242,796.6 UAH;
· Increase of net production sales volume in 1.8 times (that made up 491,484.0 UAH) in 2004;
· The issuer owns 159 gas stations, 98 of them work under the brand “OKKO,” the brand is well known in Ukraine and has a positive image;
· The company has a clear strategy of development till 2008, the management of the company is eager to implement modern management standards.
Negative factors considered while assigning the credit rating:
· High dependency of the company on one gas products supplier, making the company sensitive to the supplier’s risks;
· Influence of administrative regulation methods on the gas-products market that leads to restrictions on business profitability and sensitivity to currency risks;
· High dependence level on the world petrol (oil) price and in particular dependence on the price policy of the Russian Federation;
· Substantial competition in the gas-products market with the limited number of players.
Ukrainian national scale ratings information is available on Credit-Rating public Web site at www.credit-rating.com.ua.
In order to get more detailed information please contact Dmitriy Zadesenetz, Kyiv (044) 490-25-50, 490-25-54, cr@credit-rating.com.ua.
