OREANDA-NEWS. On 25 December 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaBB from uaBB+ (uaBB plus) the long-term credit rating assigned to registered housing bonds (series A and series B) issued by Ternopil-based Rovex LLC (`issuer` or `company`). The amount of the issues is UAH6m and UAH50m respectively to the series stated, with up to 4-year original maturity. The rating outlook has been revised to negative. The company`s principal activity is wholesale and retail trade with foodstuffs and non-foods as well as with alcoholic beverages and tobacco products. To revise the rating Credit-Rating considered issuer`s financial statements for 1H2008 and its other inside information furnished by the company.

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.

Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.

Factors maintaining the credit rating

Issuer`s leading positions in Ternopil Oblast`s retail sector: the Torgovyi Mir shop chain, which is operated by the issuer, embraced 19 outlets as of June 30, 2008.

Growth in the volume of net earnings from the sales by 42.5% to UAH330.3m in 1H2008 comparatively to 1H2007.

Factors constraining the credit rating

Opacity regarding refinancing of issuer`s liabilities; high specific gravity of short-term debt liabilities in the overall volume of the company`s debt (51% of issuer`s short-term loans are to be redeemed by end 1H2009).

Growing competition in the segment of food retailing under decreased amount of population`s earnings.