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12.01.2007
Upcoming bond issue by «Iboya» JE LLC assigned uaBB credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB long-term credit rating to upcoming issue of registered coupon bonds (of A series) by Dnepropetrovsk-based "Iboya" JE LLC ("the Issuer" or "the company") for the amount of UAH 40m with the 5-year original maturity. The main company`s activity is importing and selling construction materials. In the course of analysis the "Credit-Rating" agency used Issuer`s financial reports for 2001-2005 and for 9 months of 2006 as well as other inside information furnished by the company.
The uaBB issue rating shows that the debt liability given is the least affected by the risk of non-payment of the principal and interest within the speculative grade. The obligor, however, may be impaired to timely and in full meet its commitments on the obligation in the Ukrainian financial market environment in the event of adverse changes in business, financial and economic conditions. However, the possibility of nonpayment is low in the near future.
Factors supporting the credit rating
- The Issuer operates on the construction materials market in the floor-cloth niche with the demand growing 20-25% year-on-year.
- Growth in Issuer`s key indicators over 2001 9 months 2006, specifically the assets size grew 5x (from UAH 17.6m to 93.3m), the owned capital grew from UAH (-)1.0m to UAH 19.4m
- Fast development of Issuer`s "Budapest" and "Stroycentre" trade networks over 2002 9 months 2006, specifically the number of outlets grew from 10 to 20, the commercial space from 4.6 thousand sq.m. to 21.8 thousand sq.m., which bolstered the net revenue growth from sales over the period under report from UAH 48.9m to 140.0m
Factors constraining the credit rating
- Drastic fall in Issuer`s gross profit over the past few years, in fact in 2005 it
fell to UAH 181 thousand (UAH 5.2m in 2004) and the net loss over 9 months 2006 amounted
to UAH
(-)2.1m. Positive financial result over 2005 9 months 2006 was secured by allowances of unclaimed debt securities. - High level of competitiveness on the construction materials market and its expected strengthening.
- The issue size 2.06x exceeds the Issuer`s owned capital as of 30 Sep. 2006
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
