OREANDA-NEWS. On 02 July 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaBB to registered coupon bonds (series A) to be issued by Vinnitsa Oblast-based Kryazh Private Enterprise (issuer or company). The amount of the issue is UAH30m, with 5-year original maturity. The companys principal activity is wholesale and retail trade with asbestos sheeting, cement, asbestos-cement pipes and other produce. In the course of analysis Credit-Rating considered issuers financial statements for 2003-2007 and 1Q2008 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.

Factors maintaining the credit rating

The issuers net sales grew by 30% to UAH126m during the past 3 years, the EBITDA increased 2.5x to UAH14.2m, the equity rose 7.9x to UAH30.7m, and the EBITDA profitability increased by 5.5 p.p. to 11.3%.

The issue is guaranteed by the groups participant Techprom LLC, which net sales grew almost 2x to UAH67.8m during 2005-2007.

Factors constraining the credit rating

Almost all of the issuers plant and equipment is pledged as security for bank loans, coupled with expected increase in debt burden had the issue placed in full.

The ratio of issuers EBITDA to financial obligations has been decreasing over the past few years by 0.41 p.p. to 0.75.

Growing competition on the Ukraines market of construction materials.