OREANDA-NEWS. On 12 May 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it upgraded to uaBBB+ (uaBBB plus) from uaBBB the long-term credit rating assigned to registered coupon bonds (series A) issued by Lutsk-based Lutsk Automobile Plant OJSC (`issuer` or `company`). The amount of the issue is UAH130m, with 5-year original maturity. The outlook on the rating has been revised to stable. The company`s principal activity is a component assembling of cars of VAZ, Hyundai, KIA brands, as well as of buses and trucks. To revise the rating 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).

Stable outlook indicates that there are no anticipated reasons to change rating in the course of the year.

Factors maintaining the credit rating
Growth in issuer`s output and sales rates in the past few years, in fact the company`s gains added 84% making up UAH4.6bn in 2007.
The implementation of Cherkassy-based investment project (of USD230m value) is on the stage of completion: the facility`s annual output rate is to be 120K vehicles by small component assembling.
The demand for new personal cars has been constantly growing over the past few years, with such trend expected to be further retained.

Factors constraining the credit rating
The company`s profitability is expected to decrease in 2008 due to cancellation of tax benefits.
Issuer`s dependency upon suppliers of vehicle kits: the specific gravity of 3 biggest suppliers exceeded 90% in 2007.