Research Update: Aragvi Holding (Trans-Oil Group) On CreditWatch Positive On Planned Bond Refinancing; Proposed Senior Notes Rated 'B'

Central and Eastern Europe (CEE)-based agribusiness group Trans-Oil Group, the TopCo of which is Aragvi Holding International, intends to issue a new $500 million long-term senior secured bond to refinance its existing bond of the same amount due April 2026, which we believe will be credit positive for the group and decisively address its largest short-term debt refinancing risk. We believe the group will be able to continue to adequately fund its day-to-day business needs, notably its large working capital needs, thanks to continued access to bank financing, with Aragvi generating around $200 million-$225 million of adjusted EBITDA annually. Positive free operating cash flow (FOCF) will be limited owing to increased interest expense and working capital outflows, and projected adjusted

...- Central and Eastern Europe (CEE)-based agribusiness group Trans-Oil Group, the TopCo of which is Aragvi Holding International, intends to issue a new $500 million long-term senior secured bond to refinance its existing bond of the same amount due April 2026, which we believe will be credit positive for the group and decisively address its largest short-term debt refinancing risk. - We believe the group will be able to continue to adequately fund its day-to-day business needs, notably its large working capital needs, thanks to continued access to bank financing, with Aragvi generating around $200 million-$225 million of adjusted EBITDA annually. - Positive free operating cash flow (FOCF) will be limited owing to increased interest expense and working capital outflows, and projected adjusted debt leverage should be at 2.0x-2.5x and EBITDA interest coverage at 2.2x-2.5x, overall in line with recent years. - Stable operating performance in volatile conditions in the region, larger scale of...

Research Update