OREANDA-NEWS  On 19 September Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it affirmed at uaA- (uaA minus) the long-term credit rating assigned to registered coupon bonds issued by Donetsk-based Industrial Association KONTI CJSC (`issuer` or `company`). The amount of the issue is UAH200m, with 3-year original maturity. The rating was assigned to the bond issue on May 22, 2008. The company`s principal activity is production of confectionery products. In the course of analysis and revision procedure Credit-Rating considered issuer`s financial statements for 2005-2007 and 1H2008 as well as its other inside information.

An obligor or a debt liability with uaA credit rating is characterized with the HIGH STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is susceptible to 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 enjoys strong market positions (having a 14% share on the domestic market), accompanied by high recognition of its primary brands.

Well-diversified issuer`s production base and geographical supply structure, which is supported by issuer`s 3 fabrics, with 2 of them located in Ukraine and 1 in Russia.

Issuer`s stable performance indicators (the issuer`s profitability of the EBITDA was around 12% in 2005-2007 and 1H2008, coupled with rise in issuer`s output rates).

Factors constraining the credit rating

Aggressive financial policy to which the KONTI group of companies adheres, and which is aimed at making significant investments with the borrowed funds.

Issuer`s significant debt burden, which tends to grow, in fact as of June 30, 2008 the issuer`s debt amounted to UAH969.7m, or 65% of all its assets, including the short-term debt being of UAH199.3m.