OREANDA-NEWS. On 21 February 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it had upgraded to uaBBB from uaBB+ the UAH30m 3-year registered coupon bonds (A, B series) issued by Lviv Oblast-based Galychyna CJSC (Issuer or company). The companys primary activity is production of whole milk products, and of powdered defatted milk, butter and hard cheeses. In the course of analysis Credit-Rating considered Issuers financial statements for full 4Q2007 as well as other inside information furnished by the Issuer.

An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.

Factors maintaining the credit rating
The companys key figures have improved in 2007, namely the volume of output advanced 27 percent to 60.5K metric tons, which was prompted by new production facilities set in operation; the companys net sales added 68 percent to UAH270m; the net profit rose 2.4x to UAH9.1m with the EBITDA increased by 81 percent to UAH30.6m.
Issuers positions on the national dairy market have improved over 2007 accompanied by Issuers range of products expanded.

Factors constraining the credit rating

The Issuer is currently experiencing high debt burden, which has been prompted by Issuers dynamic investment policy (the equity to assets ratio makes up 0.14 as of Dec. 31, 2007) and by the fact that almost all Issuers fixed assets are liened for loans.