OREANDA-NEWS. On 16 April 2009 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaBB with negative outlook from uaBBB+ (uaBBB plus) the long-term credit rating assigned to Lutsk-based Lutsk Automobile Factory OJSC (LUAZ) and to its two issues of registered coupon bonds: series A for UAH130m due June 14, 2010 and series B for UAH200m due May 7, 2013. The company`s principal activity is a component and aggregate car assembling of VAZ, Hyundai and Kia makes, as well as bus and truck manufacturing.

These rating actions have been prompted by increase in company`s debt burden (mainly due to depreciation of the national currency) under deep decline in car output rates recorded in 2009 caused by adverse environment in Ukraine`s economy. Credit-Rating has also noted significant specific gravity of short-term debts, which refinancing may be impaired in today`s conditions in financial market.

Negative outlook indicates Credit-Rating`s expectations regarding further impairments in company`s financial state under ongoing negative trends in Ukraine`s automotive sector.

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.