OREANDA-NEWS. November 20, 2009. Credit-Rating, a nationally recognized credit rating agency in Ukraine has announced that it assigned a long-term credit rating of uaBBB to registered coupon bonds (series B) issued by Kiev-based State Territorial and Industry Association South-West Railways (‘issuer’). The amount of the issue is UAH200m, with 2-year original maturity. The outlook on the rating is stable. The issuer’s principal activity is transportation of cargo and passengers by railways. In the course of analysis Credit-Rating considered issuer’s financial statements for 2004-2008 and 1H2009 and its other inside information.

An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.

Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.

Factors maintaining the credit rating:

A monopolistic standing of Ukrzaliznytsya State Administration of Railways of Ukraine, which incorporates the issuer in the sector of railways.

Strategic importance of railways for Ukraine’s economy.

Factors constraining the credit rating:

Ongoing negative trends in Ukraine’s economy, which weighs on volumes of cargo transportations.

Anticipated significant investments.

Opacity with regard to prospects for reforming and development strategy of Ukrzaliznytsya State Administration of Railways of Ukraine.

Absence of consolidated financial statements of Ukrzaliznytsya State Administration of Railways of Ukraine.

Dependency of Ukrzaliznytsya State Administration of Railways of Ukraine’ activities upon state regulatory policy.