JCR Eurasia Rating has assigned credit ratings of Boyner Perakende ve Tekstil Yatırımları A.Ş.and Its Affiliates and Cash Flows Relating to the Planned Bond Issues as ‘BBB(Trk)/Positive’ on the Long Term National Scale along with ratings of ‘BBB-/Stable’

JCR Eurasia Rating has evaluated “Boyner Perakende ve Tekstil Yatırımları A.Ş.” in an investment grade category on a national and international level and assigned Long Term National Ratings of ‘BBB (Trk)/Positive’. On the other hand, the Long Term International Foreign and Local Currency ratings have been assigned as ‘BBB-’ along with a ‘Stable’ outlook. Other notes and details of the ratings are given in the table below.

Long Term International Foreign Currency

:

BBB- / (Stable Outlook)

Long Term International Local Currency

:

BBB- / (Stable Outlook)

Long Term National Local Rating

:

BBB (Trk) / (Positive Outlook)

Short Term International Foreign Currency

:

A-3 / (Stable Outlook)

Short Term International Local Currency

:

A-3 / (Stable Outlook)

Short Term National Local Rating

:

A-3 (Trk) / (Stable Outlook)

Sponsor Support

:

2

Stand Alone

:

B

Boyner Perakende ve Tekstil Yatırımları A.Ş., which has roots going back to the establishment of Altınyildiz Mensucat ve Konfeksiyon Fabrikaları A.Ş. by the Boyner Family in 1952 to operate in the fields of production and marketing of wool fabrics, has been listed since 1991 and adopted its current name following the re-structuring undertaken within the Boyner Group in 2014. The Company currently operates in the fields of retailing, production & marketing of textile and apparels and real estate development via its 7 subsidiaries. It reaches its customers through 378 different shops dispersed nationwide, various brand labels along with an effective sales network.

Boyner Group has become a pioneer in the sector with a scale increase provided via the inorganic growth pursued by the buyback of 50% shares of Beymen, 66.5% shares of Boyner Mağazacılık and acquisition of all shares of Yeni Karamürsel Giyim ve İhtiyaç Maddeleri Pazarlama A.Ş.by Boyner Büyük Mağazacılık, in addition to its organic growth strategy.

The principle factors that underlie the determination of the outlook on the Long Term National Rating as “Positive” include a product range that appeals to all customer segments, the positive impact of the measures in the fields of technological investments and operational productivity on Company EBITDA, the maintenance of the upward trend in the gross profit margin, improvement in sales per m2 of retail space, customer satisfaction created by pre and after sales services, the capability to rapidly respond to customer demands by a nationwide sales network, the rising share of 7 different online and mobile channels across its sales revenues, the capacity of the rising market and competitive effectiveness to support the Company’s future growth, sustainable revenue streams and current balance sheet composition. In addition, the foreign currency risk stemming from the acquisition of shares from CVCI has been minimized via the payment of the last installment in June, 2015.

On the other hand, the low net working capital levels resulting from the funding requirements associated with acquisitions and long-term investments and high level of leverage despite the realized equity injection in the current financial year continue to represent significant risk factors. As such, the pressure exerted by the financial expenses on the revenue composition is maintained. The intensity of price competition in the market, the sensitivity of customers to prices and current conjecture seem to negatively impact the sector in general along with the Boyner Group.

However, taking into consideration the willingness of the qualified shareholder and other shareholders to support the Company along with their financial strength, the Company’s scale, the contribution that will be provided by planned investments and sectoral expansion , the Sponsor Support grade of Boyner Perakende ve Tekstil Yatırımları A.Ş., has been determined as (2). Taking into account the Company’s capability to manage the incurred risks regardless of shareholder support, internal equity generation capacity and current capitalization level, the grade in the Stand Alone category has been assigned as (B).

For more information regarding the rating results, you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Orkun İNAN.

JCR EURASIA RATING

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