Ukraine Markets Daily (December 05, 2017)

Market news

  • Moody’s affirms Ferrexpo’s rating at Caa1, changes outlook to positive from stable

Market comment

The UX index decreased by 0.1% on yesterday while the PFTS index remained unchanged (in UAH terms). The WIG-Ukraine index increased by 0.1%. On the interbank exchange market, the USD/UAH was up by 0.5% to UAH 27.22 (mid price), according to Thomson Reuters. The official exchange rate reported by the NBU was UAH 27.05.


Moody’s affirms Ferrexpo’s rating at Caa1, changes outlook to positive from stable

On December 4, 2017, Moody’s Investors Service (Moody’s) affirmed Ferrexpo’s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) at Caa1 and Caa1-PD, respectively. The Service has also affirmed the senior unsecured notes rating at Caa1 issued by Ferrexpo Finance plc. The outlook on all ratings is changed to positive from stable. One of the key drivers of the outlook change is the improvement of the Company’s liquidity as a result of the recent attraction of USD 195 mn pre-export facility, which will help Ferrexpo to fund its debt repayments during 2018. Another reason for the outlook change was the positive outlook on Ukraine’s sovereign rating; however, the foreign currency bond country celling still restricts the Company’s rating.

Our view:

Despite the fact that Ferrexpo has very strong business profile, stable financial position recently improved by the new credit facility, all the Company’s operating assets are located in Ukraine. This makes it highly vulnerable to Ukraine’s sovereign risks, which may have a significant influence on Ferrexpo’s operations when realize.


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Kind regards

Research Team