Moody's rates NKNK bond B2

Moody's Investors Service said it assigned a provisional B1 corporate family rating to the Nizhnekamskneftekhim group (NKNK) and a B2 rating to its proposed $200 million bond. Moody's Interfax Rating Agency assigned it an A2.ru long-term national scale credit rating.

The outlook is stable.

The ratings are underpinned by high risk embedded in the group's the financing plan, an expected two-year period of negative free cash flow generation, significant Capex required to continue modernization of the existing facilities and expansion of the product range, execution risk and a lack of established track record in achieving projected margins on several products, the agency said.

The ratings also reflect NKNK's size and leading position in the domestic market, its competitive position in the global rubber market, its close proximity to raw material suppliers and large customers in Tatarstan and the continuous demand for rubber and plastic products expected in the medium term, the agency said.

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