Credit-Rating Upgraded Svit Elektroniky CJSC`s Bonds to uaBBplus
OREANDA-NEWS. On 06 May 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it upgraded to uaBB+ (uaBB plus) from uaBB the long-term credit rating assigned to registered coupon bonds (series A, B) issued by Kiev-based Svit Elektroniky CJSC (`issuer` or `company`). The amount of the issue is UAH20m, with 3-year original maturity. The company`s principal activity is wholesale and retail trade with home appliances. To revise the rating Credit-Rating considered issuer`s financial statements for 4Q and full 2007 as well as its other inside information.
An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Factors maintaining the credit rating
The company`s goods turnover grew 1.5x to UAH367.7m in 2007, which is 51.3% higher than in 2006; the issuer`s performance has enhanced, in fact the EBITDA profitability made up 5.35% (3.65% in 2006); the EBITDA grew 2.2x to UAH19.7m; the negotiability of accounts payable decreased by 14 days to 9 days, the negotiability of accounts receivable decreased by 2 days to 4 days.
The issuer`s outlet network has grown 1.2x (to 38 as of December-end 2007 from 32 as of December-end 2006 accompanied by active development of logistics network by regional representatives.
Factors constraining the credit rating
Growing competition in the segment of home appliances coupled with its vulnerability to external factors, namely to changes in customs regulations and to seasonality of demand.