Kernel enters into new USD 100 mln PXF

Ukraine’s largest sunflower oil producer and grain trader
Kernel (KER PW, KERPW) reported on Feb. 22 that it has entered into a USD 100
mln 2.5-year pre-export credit facility with a syndicate of European banks. The
loan will be used by the company to fund the working capital needs for its
grain export business.

Andriy Perederey: The new pre-export credit facility will improve Kernel’s flexibility
in grain trading and its ability to capitalize on crop price seasonality to
improve its trading margin. If fully withdrawn, the new facility will push
Kernel’s net debt higher from USD 506 mln as of end-September, potentially
raising its Net Debt/LTM EBITDA ratio from 1.70x as of end-September to 2.0x,
which still looks a safe level. We retain our Buy recommendation on Kernel
stock, as well as our neutral view on its Eurobond.