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KAMAZ: OUTLOOK IS STABLE

24 April 2018

The Analytical Credit Rating Agency (ACRA) has assigned A+(RU) to KAMAZ PTC, outlook Stable. A credit rating has been assigned to KAMAZ PTC for the first time.

As noted by the agency, the credit rating is based on high systemic importance of the Company for the Russian economy and high level of state influence according to the ACRA methodology. In their opinion, the Company enjoys a strong position in the market, has high-quality corporate governance, strong geographic diversification, strong liquidity assessments, and medium assessments of business profile, size, profitability, leverage and coverage. The credit rating is under pressure from weak cash flow indicators resulting from the investment cycle peak that the Company is currently in.

In the estimation of ACRA, the Company is a key player in the Russian truck market that is of strategic importance for the state in terms of ensuring transportation security. In addition, the car industry demonstrates one of the highest multiplier effects: one job in this sector creates ten or more jobs in related industries. KAMAZ is a backbone enterprise in its location employing 40,500 people in its major manufacturing site. The Company is a consistent recipient of very strong direct support from the government in form of concessionary loans, co-financing of research and development, state guarantees for loans and bond issues, subsidies for scrappage and trade-in programs, subsidies to support domestic producers compliant with industrial assembly criterion, etc.

The credit rating and its outlook are expected to be revised within one year following the rating action date.

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