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14.03.2007
Bond issue by «Kapital Leasing Finance» LLC assigned uaB+ (uaB plus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB+ (uaB plus) long-term credit rating to the issue of registered coupon bonds (A, B series) by Kiev-based "Kapital Leasing Finance" LLC ("the Issuer" or "the company") for the amount of UAH 35m due on 24 Feb. 2010. The main company`s activity is providing leasing services. In the course of analysis the agency used 2006 financial statements of "Kapital Leasing" OJSC as an underwriter ("the Underwriter"), for the Issuer has not been involved in business activity yet.
The uaB issue rating reflects higher default possibility than of the uaBB rating, though in this case the obligor`s capacity is adequate to pay its obligations in the Ukrainian financial market environment. This debt liability is more affected by the adverse changes in business, financial and economic conditions than debt liabilities with higher ratings. That may negatively affect the obligor`s capacity and willingness to fully and timely pay interest and principal on obligations. The "+" and "-" modifiers denote rating`s relative status within major categories
Factors maintaining the credit rating
- The Issuer and the Underwriter on the planned bond issue are incorporated into the "Foyil" group of companies, which has significant experience on the international financial markets.
- Top-management`s experience in finance and leasing, which creates additional opportunities for Underwriter`s development.
- High growth rates of Ukrainian leasing market and expected retention of such a tendency.
Factors constraining the credit rating
- Risks, which may incur under redistribution of cash-flows within the "Foyil" group, with disregarding Issuer`s und Underwriter`s interests.
- Short term of Issuer`s and Underwriter`s existence entailed by their ambitious development strategy, specifically the planned increase in gross sales from UAH 1.9m in 2006 to UAH 353.5m in 2008.
- The issue size 6.9x exceeds the Underwriter`s authorized capital and 4.1x its assets as of 1 Jan. 2007.
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
