RPT-Fitch Downgrades Interpipe to 'CCC' | Reuters

RPT-Fitch Downgrades Interpipe to 'CCC' | Reuters:

"Fitch Ratings has downgraded Ukrainian-based Interpipe Limited's (Interpipe) Long-term Issuer Default Rating (IDR) and senior secured rating (applicable to the company's 2017 Eurobonds) to 'CCC' from 'B-'. The bond's Recovery Rating is 'RR4'.

The rating action reflects the operational and financial uncertainty created by two current trade matters involving the export of pipes to the Customs Union involving Russia, Kazakstan and Belarus - Interpipe's largest pipe export market accounting for approximately 25% of total pipe sales in 2012 - and the US respectively. The Customs Union matter relates to the non-renewal of the previous quota for Ukrainian pipe imports for H213. Russian Prime Minister Dmitry Medvedev indicated in July 2013 that the quota would not be extended.

Exports above the quota are subject to a customs duty of at least 19% customs duty, making sales into Russia only marginally profitable. Interpipe requested a reduction in applicable customs duties in April 2013."

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