Fitch rates Tavan Bogd notes B

Fitch Ratings said it assigned Tavan Bogd Trade LLC's (B-/stable) proposed dollar senior notes a B expected rating with an expected recovery rating of RR4.

The notes constitute senior obligations of Tavan Bogd as they represent the company's unconditional and irrevocable obligations.

The notes are pledged by capital stock of some subsidiaries including Gobi.

Tavan Bogd plans to use the proceeds to refinance bank debt located at its operating subsidiaries, invest in capex, and to boost its cash balance.

Fitch said Tavan Bogd’s ratings reflect its solid domestic business profile, supported by a strong market position, recognizable brands and a record of expanding revenue and earnings through a combination of organic growth and acquisitions.

These factors mitigate its modest size relative to global peers, the agency said.

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