S&P downgrades Kalina

Standard & Poor's said it lowered the Russia national scale rating on Kalina JSC to ruBBB+ from ruA+.

"The downgrade reflects our concerns about Kalina's aggressive liquidity management, increasing debt leverage amid weakening macroeconomic conditions and its exposure to interest rate and foreign currency risks," S&P analyst Anton Geyze said in a statement.

The company's weak liquidity position stems from its predominantly short-term debt maturity profile, without sufficient committed backup liquidity sources covering short-term maturities, as well as dependence on the bank's willingness to amend or waive its covenants on long-term loans, according to the agency.

Kalina's adjusted debt-to-EBITDA ratio deteriorated to 2.7x from 2.3x at year-end 2007, due to dividend payouts and share buybacks that were not offset by marginal EBITDA growth, S&P said.

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