JCR Eurasia Rating, in its periodic review, has evaluated the credit rating of the consolidated structure of Katmerciler Araç Üstü Ekipman Sanayi ve Ticaret A.Ş. and cash flows of its “Existing Bond Issues” in a high investment grade category and upgraded

JCR Eurasia Rating has evaluated the credit rating of the consolidated structure of Katmerciler Araç Üstü Ekipman Sanayi ve Ticaret A.Ş. and cash flows of its “Existing Bond Issues” in a high investment grade category and upgraded the Long Term National Rating from “BBB+ (Trk)” to “A- (Trk)” with a Stable outlook. The Long Term International Foreign and Local Currency ratings and outlooks have been affirmed at “BBB-/Stable”. The credit ratings and their details are provided in the table below. As there are no additional legal and/or financial collateral guarantees that are/will be provided separately for the repayment of the existing/planned bond issues by Katmerciler Araç Üstü Ekipman Sanayi ve Ticaret A.Ş., the note assigned for the TRY denominated bond issuances have been assigned as the same as the Company's Long and Short Term National Local Ratings.

Long Term International Foreign Currency


BBB- / (Stable outlook)

Long Term International Local Currency


BBB- /( Stable outlook)

Long Term National Rating


A- (Trk) / (Stable outlook)

Long Term National Issue Rating


A- (Trk)

Short Term International Foreign Currency


A-3 / (Stable outlook)

Short Term International Local Currency


A-3 / (Stable outlook)

Short Term National Rating


A-1 (Trk) / (Stable outlook)

Short Term National Issue Rating


A-1 (Trk)

Sponsor Support



Stand Alone



With over 30 years of experience, Katmerciler manufactures over 30 different types of specialty vehicles such as tipper trucks, firefighting vehicles, jetting trucks, rescue vehicles, street sweepers, garbage and transportation trucks, riot control vehicles, etc. that serve the needs of local administrations and public institutions in its manufacturing plant located in Izmir. The Company’s new Ankara factory, which is expected to both expand the production capacity as well as support the defense sector specific vehicle production, was completed in August 2016. Owing to national tender offers and public procurements, Katmerciler became a prominent player in the domestic market, and managed to reach significant export volume as well owing to its sales network in neighboring regions. The Group actively works to build international ventures and collaborations so as to develop its business volume and increase its production capabilities. The Company, whose majority shares belong to the Katmerci Family, went public in 2010 and is quoted on the Borsa Istanbul (BIST).

While a considerable portion of Company revenues were generated by exports in prior periods, revenues from high-valued public procurement and tender offers outpaced that of the exports in FY2015. Katmerciler’s overall profitability significantly improved in FY2015 thanks to significantly increased sales volume and a decrease in short foreign exchange position that prevented sizable FX losses. Considering the Group’s public tender business volume, additional investments realized to expand the production capacity and wide-range export network, Katmerciler’s sales growth and high profitability are expected to be maintained in the following periods. The Group holds ‘Facility Security Clearance’ and ‘Production Permit’ accreditations issued by the Ministry of National Defense and continues to explore international partnership and co-operation opportunities with leading companies operating in the defense sector. Considering these recent developments, it is expected that Katmerciler will continue to sustain profitability with high value added vehicles and accumulated know-how bolstered via the R&D facility investment which will be a benefactor of government subsidies. While the weight of external funding in Company balance sheet is noted, considering the internal resource generation ability of the Company, debt-service ratio is deemed within acceptable levels.

Although the specialty vehicle sector is listed under the automotive supply industry, the dynamics of the sector are shaped by the needs of local administrations and public institutions, rather than the automotive industry. The main risk issues of the specialty vehicle sector are the political, economic, and legal risks in countries in Africa and the Middle East, relations of countries in these regions with Turkey, suppressed global economic growth outlook, and increasing competition of international vehicle suppliers. Since the Group’s customer portfolio mostly consists of public institutions and governmental administrations, revenues to be generated are dependent on fiscal policies, the machinery & equipment renewal plans of governmental institutions, and budgets of public institutions. In addition to local administrations’ demand for a minimum service level of products, the mandatory compliance requirement with the ADR standards that define the minimum level of security standards set up by European standards agencies, help the Company and the sector to maintain their growth potential. In addition to these, the demand for recently developed vehicles and equipment produced for the defense industry is expected to gradually increase and bolster the Company’s revenue generation in the following periods.

Effective export channels, relatively low-collection-risk of public procurements, business volume, profitability oriented growth strategy, investments aiming to develop high value-added products, high local market share along with contraction of the short foreign currency position and solid profitability indicators constitute the main pillars of the upgraded credit rating of “A- (Trk)” on the Long Term National Rating assigned ot Katmerciler. Considering the cost of domestic and international sourced raw materials and high volatility observed for foreign exchange rates, foreign currency position of the balance sheet, the share of exports in total sales volume and projections for the upcoming periods, the Long Term International Local and Foreign Currency grades have been determined at the country ceiling “BBB-”. The sustainability of the Company’s export based revenues, respective risks for counterparty countries, return performance of current investments concerning the defense industry, sustainability of current demand for Company products from public sector, developments concerning partnerships with foreign corporations and progression of current profitability ratios will be monitored in the upcoming periods for the reassessment of the rating grades and outlooks.

The Katmerci Family, the Group’s founder and dominant shareholders, are considered to have the willingness to support the Group if needed. Taking into account the Group’s profit generation capacity, business volume, realized investments, and long track record in the sector, the Katmerci Family is thought to have the financial capacity to support the Company. In this regard, the Group’s “Sponsor Support Grade” has been determined as (2), denoting a sufficient level. On the other hand, the Group’s “Stand Alone Rating”, measuring its financial capacity to meet its commitments and obligations without external support has been evaluated as (B), indicating an adequate level, considering the Company’s internal resource generation capacity, the composition and weight of external resources within balance sheet, liquidity level and expectations for the upcoming periods.

For more information related with the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Ozan SIVACI.


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