OREANDA-NEWS. On 24 June 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it upgraded to uaBBB from uaB the long-term credit rating assigned to Dnepropetrovsk Oblast-based Pavlogradvugillya OJSC (`issuer` or `company`) and to uaBB from uaB the long-term credit rating assigned to company`s registered coupon bonds (series A-Y). The amount of the bond issue is UAH134.7m, with 7-year original maturity. The outlooks on both ratings have been revised to stable. The company is the biggest Ukraine`s producers of energy and coke coal of gas group. To revise the rating Credit-Rating considered issuer`s financial statements for 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.

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.

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

Factors maintaining the credit rating

The company is incorporated with the vertically integrated DTEK energy company.

DTEK enjoys strong market positions, having supplied 27% of the national production of electrical energy generated at thermoelectric power plants and 21% of the national output of coal in 2007 (the specific gravity of the issuer in the group`s overall output made up 78%).

The demand for the energy coal is expected to grow.

Factors constraining the credit rating

Risks imposed by redistribution of cash flows neglecting issuer`s interests.

Issuer`s consolidated debt exceeded the EBITDA 3.4x in 2007, with the company`s financial liabilities formed with the intra-group indebtedness by over 90%.

Issuer`s volatile performance indicators.

The character of the company`s bond issue does not correlate with usual parameters of coupon bond issuances (this factor is applied to the issue`s rating only).

DTEK company is dependant upon state regulatory policy in the industry.