TASHKENT, Uzbekistan, September 9. Fitch Ratings has downgraded the Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of Uzbekistan's Uzagroleasing Joint Stock Company (UAL) from 'B+' to 'B-' with Negative Outlooks, Trend reports.
Fitch's assessment of Uzbek Uzagroleasing Joint Stock Company (UAL) under the Government-Related Entities (GRE) Criteria resulted in a reduced score of 22.5 (previously 35), which combined with a Standalone Credit Profile (SCP) of 'ccc', puts UAL's IDR three notches below Uzbekistan's sovereign rating.
UAL faces a risk of inadequate state support, which could negatively affect its already weak SCP. Though the state proposes an equity swap to strengthen UAL's capital structure, a lack of new funding could further harm its finances due to the company’s structurally weak liquidity. Approximately 50 percent of UAL's debt from 2018 through 2022 is state-originated and denominated in local currency at fixed rates, making its distress less impactful for investors than other government-related entities (GREs).
UAL is a national leasing company with total assets of 2 billion Uzbek soums ($181 million) as of the end of 2022. Composed of local preferential state loans and bank loans, UAL's debt increased to 1.7 trillion Uzbek soums ($140 billion) in 2022, driven by a growing leasing portfolio.
