Moody's downgrades Agrokor's rating due to debts and lower results

The rating agency Moody's has lowered the credit rating of the Croatian concern Agrokor and its notes. The rating has been lowered from B2 to B3, and the probability of default rating from B1-PD to B3-PD.

At the same time, Moody's has downgraded the senior unsecured rating assigned to the notes issued by Agrokor and due in 2019 and 2020 to B3 from B2. The outlook on all ratings is stable.

The rating has been downgraded due to a combination of lower last year's results and the Group's high level of indebtedness.

Agrokor has recently completed extensive refinancing, postponing the maturity of current debts in the amount of around EUR 840 million by two to three years.

It agreed with VTB Bank to postpone the maturity of around EUR 340 million worth of debt by close to two to three years. Agrokor thereby reduced its short-term indebtedness, and most of its financial arrangements are due from 2019 on. It is obvious that the most demanding period for Todoric's concern will begin in 2019.

Agrokor's debt consists mostly of notes and bilateral loan arrangements with banks and financial institutions. Agrokor pays a remarkably high interest rates of 8.875% to 9.875% on three senior notes due in 2020. The loan arrangements with banks are somewhat more favorable, and variable interest rates range from 3% to 10%.

Fortenova grupa d.d.

Moody's Investors Service Inc. New York

Agrokor

Moodys

credit rating

security notes rating

Agrokor debt

VTB Bank

notes

variable interest rate