Fitch rates EuroChem notes BB-

Fitch Ratings said it assigned EuroChem Finance plc's issue of loan participation notes for the aggregate principal amount of $300 million 7.895% due 2012 a final senior unsecured BB- rating.

This action follows a review of the final terms and conditions conforming to information already received.

EuroChem's payment obligations in respect of the notes and obligations under a trust deed with Deutsche Trustee Co. Ltd. will benefit from a first fixed charge with full title guarantee in favor of the trustee for the benefit of itself and the noteholders of certain EuroChem Finance's rights and interests as lender under the loan agreement, the agency said.

The agency said the covenants in the loan agreement include an equal ranking of the loan with present or future unsecured creditors of EuroChem and a negative pledge. With a 2005 total debt-to-EBITDA ratio of 0.8x and consolidated net worth of $1.02 billion in September 2006, the company has sufficient headroom under its covenants, although Fitch said it expects EuroChem's leverage to deteriorate over the next two to five years on the back of rising capital expenditure to finance its development strategy implementation.

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