Fitch Ratings has assigned JSC MFO Crystal’s (Crystal) GEL10 million issue of senior unsecured notes a final long-term rating of ‘B’. The bonds mature in December 2019, and the coupon is paid quarterly at a rate of 450 basis points over the National Bank of Georgia’s monetary policy rate.
Crystal has Foreign and Local Currency Long-Term Issuer Default Ratings of ‘B’ with Stable Outlooks, and Short-Term Local and Foreign Currency Issuer Default Ratings of ‘B’.
The issue’s rating corresponds to Crystal’s ‘B’ Long-Term Local-Currency IDR, which reflects the business focus on microfinance (MFO) lending in a high-risk operating environment in Georgia, Crystal’s rapid recent growth, and market and refinancing risks resulting from the predominance of foreign-currency wholesale funding.
The ratings also factor in Crystal’s sound performance to date, reflected in the company’s solid asset quality, profitability and capitalisation metrics. At the same time, the ratings are constrained by the mono-line business model, as Crystal is focused on micro lending in Georgia.