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S&P affirms VF Ukraine 'CCC+' ratings, outlook revised to stable from negative
KYIV. Aug 26 (Interfax-Ukraine) – S&P Global Ratings revised its outlook on VF Ukraine to stable Vodafone from negative, mirroring the stable outlook on Ukraine, and affirmed its ‘CCC+’ ratings on VF Ukraine and its debt.
"We continue to expect VF Ukraine’s credit measures to remain stable with S&P Global Ratings-adjusted leverage below 3.0x and free operating cash flow (FOCF) to debt of 5%-10%," S&P said in a statement on its website.
As the agency said, the outlook revision follows the rating action on our sovereign credit rating on Ukraine (Ukraine foreign currency ratings raised to ‘CCC+’ from ‘SD’ on completed debt restructuring).
"We cap our issuer credit rating on VF Ukraine at the level of the ‘CCC+’ transfer and convertibility (T&C) assessment on Ukraine. This reflects our view that the Ukrainian government would likely restrict access to foreign exchange liquidity for Ukrainian companies, including VF Ukraine," S&P said.
S&P also said that excessive foreign exchange volatility creates liquidity risks for VF Ukraine.This is because all the company’s debt is denominated in U.S. dollars, while its revenue and cash flow are in Ukrainian hryvnia.
"However, we still assess VF Ukraine’s liquidity as adequate, given that it has positive cash flow, that a significant proportion of its cash balance is held in hard currency (11% in U.S. dollars and 55% in euros as of March 31, 2022), and that it has no debt maturities until February 2025," the agency said.
