Credit-Rating Downgrades Poltavamotorservice PE Bonds to uaCCC
OREANDA-NEWS On 05 November Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaCCC from uaB- (uaB minus) the long-term credit rating assigned to registered coupon bonds (series A) issued by Poltava-based Poltavamotorservice PE (`issuer` or `company`). The outlook on the rating has been changed to negative. The amount of the issue is UAH19m due Jul. 22, 2012. The company`s principal activity is trade with Mazda and Suzuki cars in Poltava Oblast. To revise the rating Credit-Rating considered issuer`s financial statements as at 1H2008-end and its other inside information.
An obligor or a debt liability with uaCCC credit rating is characterized with the VERY LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. There is a default possibility.
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.
Factors constraining the credit rating
Issuer`s significant debt burden: according to the indicators of the FY ended June 30, 2008 the ratio of issuer`s net debt to the EBITDA is around 9.0 times.
Delay in interest payments for the 5th coupon period in the amount of UAH0.8m, which was to occur on Oct. 21, 2008.
Volatile indicators of issuer`s performance recorded over the past few years.
Negative trends in the issuer`s business sector prompted by decline in demand for vehicles.