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.

DISCLAIMER

Although the information in this report has been obtained from sources which Empire State Capital Partners believes to be reliable and was collected in good faith, we do not represent or warrant its accuracy, except with respect to information concerning Empire State Capital Partners, its subsidiaries and affiliates, either expressly or implied, and such information may be incomplete or condensed. Nor has the information and/or data been independently verified, and so is provided without further caveat regarding its reliability, suitability for commerce or specific purpose. This report does not constitute a prospectus and is not intended to provide the sole basis for an evaluation of the securities discussed herein. All estimates and opinions included in this report constitute our judgment as of the date of the report and may be subject to change without notice. Empire State Capital Partners or its affiliates may, from time to time, have a position or make a market in the securities mentioned in this report, or in derivative instruments based thereon, may solicit, perform or have performed investment banking, or other services (including acting as advisor, manager) for any company referred to in this report and may, to the extent permitted by law, have used the information herein contained, or the research or analysis upon which it is based, before its publication. Empire State Capital Partners will not be responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission. This report is confidential and is being submitted to select recipients only. It may not be reproduced (in whole or in part) without the prior written permission of Empire State Capital Partners. Any recommendations, opinions, forecasts, estimates or views herein constitute a judgment as at the date of this report. This document has been produced independently of Empire State Capital Partners and the recommendations, forecasts, opinions, estimates, expectations, and views contained herein are entirely those of the research analyst(s). While all reasonable care has been taken to ensure that the facts presented herein are accurate and that the respective recommendations, forecasts, opinions, estimates, expectations, and views are fair and well considered, none of the research analyst(s), Empire State Capital Partners or any of its directors, managers or employees has verified the contents of this document and, accordingly, no research analyst, Empire State Capital Partners or any of its respective directors, managers or employees shall be in any way responsible for its contents.

Kind regards

Research Team

EMPIRE STATE CAPITAL PARTNERS