Fitch rates O’Key bond B+

Fitch Ratings said it assigned an expected B+ rating to O’Key LLC’s upcoming RUB 5 billion bond with a recovery rating of RR4 and an expected national long-term rating of A(rus).

The notes are rated at the same level as O’Key’s issuer default rating of B+, reflecting the absence of subordination to other unsecured debt issued by the group, Fitch said.

The planned five-year RUB 5 billion senior unsecured bond is expected to be issued by O’Key with a guarantee by the holding company, O’Key Group SA and a suretyship of JSC Dorinda, the group entity that owns real estate and long-term lease rights, the agency said.

These notes rank junior to O’Key’s RUB 5 billion secured debt instruments, Fitch added.

The bond also benefits from a put option in one year, the agency said.

The proceeds will be used to refinance part of O’Key’s short-term debt and for capital expenditures.

The agency said there will not be a material increase in gross or net debt as a result of the bond issue.

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