Fitch assigns B rating for MHP 2026 bonds
5 April 2018
Fitch Ratings assigned a B rating to new bonds of
Ukraine’s largest poultry producer MHP (MHPSA) maturing in 2026, according to
its April 4 press release. The assigned rating is the same as for MHP’s other
Eurobonds and one notch above Ukraine’s sovereign rating. Fitch expects the
company will enhance its liquidity position and projects MHP’s debt service
ratio above 1.5x in 2018 and between 1.0x-1.5x in 2019-20.
Fitch’s major assumptions include an average EBITDA
margin of 31% in 2018-21 (vs. 34% in 2017), 8% average annual growth in poultry
production volume, and poultry exports growing to 48% of total sales in 2021
(from 41% in 2017).
Andriy Perederey: Fitch’s latest rating upgrade is in line with the agency’s earlier expectations. We are more optimistic than Fitch in that we
actually forecast an improvement of MHP’s EBITDA margin in 2018, which we see
occurring owing to its rising poultry exports and improving farming segment. We
remain bullish on MHP stock and neutral on its Eurobonds.
