OREANDA-NEWS. On 21 April 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine has announced that it assigned a long-term credit rating of uaBBB to registered coupon bonds (series C) to be issued by Lviv-based Galneftekhim CJSC (`Issuer` or `company`). The amount of the issue is UAH30m, with 5-year original maturity. The company`s principal activity is selling of mineral fertilizers and crop-protection products. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2007, as well as its other inside information.

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 Issuer enjoys stable market share of about 1/3, which is spread over 8 Oblasts in Ukraine, with its sales network comprising of 18 agricultural centers and 6 Farmer agristores.
Over the past 5 years the Issuer`s net sales grew 3.6x to UAH150.7m with the EBITDA increased 8.3x to UAH10.6m; the EBITDA profitability rose by 3.9 p.p. to 7% and the sales profitability advanced by 1.2 p.p. to 3.3%.

Factors constraining the credit rating
Increase in Issuer`s debt burden in 2004-2007 (the ratio of Issuer`s financial liabilities to its equity rose to 1.4 as of Dec. 31, 2007 from 0.98 as of Dec. 31, 2007, with such a trend expected to be further retained.
Growing competition on the fertilizers market, specifically in the segment of pomace mixes, which are planned to be produced by the company.
Issuer`s vulnerability to changes in the state agricultural policy and seasonality of demand.