Moody's: RG Brands view negative

Moody's Investors Service said it affirmed the B2 corporate family and probability-of-default ratings of RG Brands and changed the outlook to negative from stable.

The company's 28% top-line growth in 2006 and through the first nine months of 2007 comes with a spike in financial liabilities and limited free cash flow generation because of high investments in fixed capital, Moody's analyst Stefano del Zompo said in a written statement.

"Other factors affecting the company's risk profile include the worsening outlook for Kazakh banks, many of which are currently lending to the company, which increases the possibility that banks could restrict funding unilaterally and a certain degree of accounting risk," del Zompo said.

Ratings also reflect Kazakhstan's favorable macroeconomic environment, the company's leading share in key segments and fragmented retail market, coupled with the company's extensive distribution network, Moody's said.

Ratings could be downgraded if the company's debt-to-EBITDA ratio rises above 5 times or upgraded if it falls to about 4 times, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.