24 April 2003 12:11
Bonds Issue 4 by OAO Obiedinyonnye Mashinostroitelnye Zavody, or OMZ (Uralmash – Izhora Group) Given "A" Rating (High Reliability Level)
The Expert Rating Agency has assigned an A rating to bond issue # 4-04-30174-D by OMZ (Uralmash-Izhora Group). The agency concurrently has confirmed credit ratings assigned to bonds issues # 4-02-30174 and # 4-03-30174 at the A level.
The Expert RA’s reliability rating was assigned to the bond issue # 4-04-30174-D, placed on March 6, 2003. The trade in OMZ’s 4 bonds on the MICEX will start April 21.
The A rating means that the company’s bonds have a high reliability level.
OMZ’s business performance, financial standing, and level of corporate governance are adequate to honor the obligations provided for by the issue fully and in a timely fashion. The risk of full or partial issuer default is low.
The rating takes into account the company’s leading position in production of civilian machinery, the high level of diversification of its manufacturing and marketing, and its leading position on target markets. Preliminary results for 2002 testify to the continuing growth of the company’s revenue and its continued dominant position on Russia’s heavy machinery market. The risks connected with the cyclic demand of domestic consumers for some types of equipment can be offset by increased sales in other sectors, minimizing the probability of default on the bond issue.
The issuer’s stable financial standing also has a positive effect on OMZ bond reliability. OMZ has a significant volume of its own funds and a sufficient level of liquidity. At the same time, the company needs considerable investment resources to modernize its fixed assets, now depreciating at a substantial rate.
The company is taking energetic actions to attract borrowed capital, including from the stock market. Last November, OMZ placed currency credit notes on the market, and last March, it issued the 4 series bonds. These measures enable the company to improve the structure of its credit portfolio by increasing the share of long-term loans and thereby reducing the cost of borrowed credit resources. During the period of the rated bonds’ circulation, the probability that OMZ will fulfill its obligations under the bonds’ parameters is high.
The Bonds Issues’ Main Parameters
|
State Registered Number |
# 4-02-30174-D |
# 4-03-30174-D |
# 4-04-30174-D |
|
Volume of issue, million rubles |
390 |
390 |
900 |
|
Beginning date of placement |
September 6, 2001 |
October 4, 2001 |
March 6, 2003 |
|
Circulation period
(maturity date) |
900 days
(February 23, 2004) |
900 days
(March 22, 2004) |
2184 days
(February 26, 2009) |
|
Coupon rate
(% p.a.) |
1st coupon – 20.85%;
2nd coupon – 20.50%;
3rd coupon – 18.10%;
4th coupon – 16.5%;
5th coupon – 16.5% |
1st coupon – 20.85%;
2nd coupon – 20.15%;
3rd coupon – 18.50%;
4th coupon – 14.0%;
With regard to the 5th coupon, its rate will be set by the Board of Directors and brought to investors’ notice 15 days before payment on the 4th coupon |
1st coupon – 13.0%;
2nd coupon – 13.0%;
3rd coupon – 13.0%;
The rest are to be determined at auction on dates of payments on the 3rd and the 7th coupons |
|
Coupon duration |
180 days |
180 days |
182 days |
|
Offer date |
March 6, 2002; September 3, 2002;
March 3, 2003 |
April 3, 2002; October 1, 2002;
March 31, 2003; September 25, 2003 |
September 2, 2004;
August 31, 2006 |
|
Security |
By UZTM in the amount of 390 million rubles |
By UZTM in the amount of 390 million rubles |
By Izhorskiye Zavody in the amount of 900 million rubles |
The Expert RA Rating Agency was founded in 1997 and is among the leaders on the Russian information and analytical services market. The first ratings of corporate bond reliability were assigned in July 2002. The following companies have their bonds rated by Expert RA at date: UES, IRKUT Corporation, MGTS, GT-Energo, RTK-Leasing, and LOMO.
OMZ is Russia’ largest manufacturer of heavy machinery, and it specializes in engineering, manufacturing, sales, and service of equipment and machinery for the nuclear power industry, the oil and natural gas industries, mining, and the metal industry, as well as for sea and river transportation. OMZ stock is sold on both Russian and foreign (Berlin, Munich and Stuttgart) stock exchanges, as well as on over-the-counter markets.
For more information, please contact:
Expert RA Rating Agency
Corporate Ratings Department Public Relations
Mr. Dmitry Kabalinsky Mr. Andrei Onufriyev
Tel: +7 095 251 16 66 Tel: +7 095 974 6021
E-mail: Ratings@raexpert.ru e-mail: onufriev@omz.ru
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