print
29.03.2007
Bond issue by «Ukravotest» assigned uaB (provisional) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB (provisional) credit rating to the issue of registered coupon bonds (A series) by Lviv-based Subsidiary Company "Ukravtotest" research centre ("the Issuer" or "the company") for the amount of UAH 3m with the 4-year original maturity. The main company`s activity is testing of vehicles, as well as of their units and spare parts. In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 2002-2005 and 9M2006 as well as other inside information furnished by the company.
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 provisional rating denotes a possibility for the rating`s revision and is contingent upon taking or not taking place the event considered during the rating`s assignment procedure.
Factors maintaining the credit rating
- High Issuer`s liquidity and financial strength indicators as of 30 Sep. 2006; the major liquidity ratios are sufficiently high, with the financial independence ratio amounting to 0.89.
- "Ukravtobusprom" OJSC, which is the Issuer`s parent company and underwriter on 80% (UAH 2.4m) of the issue`s face value may, if needed, provide a financial support to the Issuer. The underwriter`s equity as of 30 Sep. 2006 amounted to UAH 575K, the assets UAH 4.99m, the 9M2006 sales amounted to UAH 3.3m, the financial performance was UAH (-)571K.
Factors constraining the credit rating
- Issuer`s detrimental operating performance during 2004 9M2006.
- The issue size (UAH 3m) exceeds the company`s equity (UAH 1.3m) as of 30 Sep. 2006 and the net sales (UAH 475.7K) for 9M2006.
- Bonds` redemption and service are contingent upon successful project`s implementation, which envisages reorganization of underwriter`s and of Issuer`s businesses.
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
