OREANDA-NEWS. On 05 May 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit-rating of uaBBB- to registered coupon bonds (series D) to be issued by Rivne-based UkrTechnoFos LLC (`Issuer` or `company`). The amount of the issue is UAH50m with 3-year original maturity. The company`s principal activity is production of pomace mixes and sale of mineral fertilizers. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2007 as well as 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).

Factors maintaining the credit rating
The Issuer`s net sales have grown 15x to UAH254.8m over the past 5 years; the EBITDA increased 62x to UAH22.8m; the equity grew to UAH19.7m from UAH0.8m, with the EBITDA profitability increased by 7 p.p. to 9%.

Issuer`s strong market positions, in fact it is among 5 leading Ukraine`s producers of pomace mixes, which consumption rates have been growing over the past few years.
The Issuer has set in operation new production facilities, which empowered it to expand its activities.

Factors constraining the credit rating
The Issuer`s debt burden grew (including the bond issue) over 2004-2007 (the ratio of Issuer`s financial liabilities to its equity grew to 5.07 as of Dec. 31, 2007 from 0.88 as of Dec. 31, 2003).
Growth in competition on the fertilizers market, specifically in the segment of pomace mixes.
Issuer`s vulnerability to changes in state agricultural policy and seasonality of demand.