Credit-Rating Assigned Zolotoy Mandarin’s Upcoming Bonds uaBB-
OREANDA-NEWS. On 03 April 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaBB- (uaBB minus) to registered coupon bonds (series A-C) to be issued by Kiev-based ZOLOTOY MANDARIN LLC (`Issuer` or `company`). The amount of the issue is UAH15m, with 5-year original maturity. The company`s principal activity is wholesale trade and production of building materials. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2006 and 9M2007 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 Issuer is incorporated with the group of companies, which operate on building materials market, specifically in the segment of pavement tile production, which has been growing over the past few years.
Issuer`s authorized stock of UAH27m exceeds the issue size of UAH15m, combined with expected capital injections by Issuer`s participants.
Factors constraining the credit rating
The group of companies, which incorporates the Issuer, does not have a development strategy and principles for generation and distribution of cash flows from operating activities within the group.
The service and redemption of the bond issue is contingent upon full and in-time delivering of 2 concrete producing facilities, accompanied by the fact that the Issuer does not gain incomes from its principal activity.
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