Fitch rates Agroton notes B-

Fitch Ratings said it assigned Agroton Public Ltd.'s planned $100 million to $125 million notes due 2016 an expected foreign-currency senior unsecured rating of B- and an expected recovery rating of RR4.

Agroton has long-term foreign- and local-currency issuer default ratings of B- and a national long-term rating of BBB(ukr).

The outlook is stable.

The proceeds will be used to redeem all existing bank debt of about $21 million and to fund the construction of additional grain storage facilities, acquire land lease going concerns and agricultural machinery and provide working capital financing, Fitch said.

The company's strategy envisages that future cash will be deposited with leading Ukrainian banks, including major Ukrainian subsidiaries of international banks, the agency said.

The draft terms of the notes contain limitations on incurring additional indebtedness based on a consolidated net debt-to-EBITDA ratio of less than 3x, Fitch said.

The noteholders will rank junior to all present and future senior secured indebtedness of the surety providers, the agency said, although the indenture imposes restrictions upon surety providers and the issuer to incur new liens.

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