S&P rates TransOil Eurobond B-

S&P said it assigned preliminary B- ratings to Aragvi Holding International (TransOil) and its proposed dollar-denominated senior secured five-year eurobond issued by Aragvi Finance International DAC.

The outlook is stable.

The company announced its intention to refinance its current debt with the eurobond, S&P explained.

Under the proposed capital structure, the agency said it expects the group's fully adjusted debt-to-EBITDA ratio will be 2.5x to 3x.

The company has high exposure to a small geographic area for the sourcing of agriculture commodities, which the industry's strong barriers to entry and the group's unique asset base somewhat mitigate, S&P said.

TransOil is the biggest originator of Moldovan grains and, over the years, it has strengthened its dominant position mainly through a nationwide infrastructure network spread across the country, the agency said.

The company is expected to post good operating performance, continue de-leveraging after the transaction and maintain an EBITDA interest coverage ratio of more than 2x in the next 12 months, S&P said.

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