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07.04.2006
Credit-Rating’s activites in 1q2006 – a Briefing
Briefing “First quarter 2006 results of “Credit-Rating” agency” was
conducted on April 7 in LigaBusinessInform’s press-center with the participation of
General Director – Mr. Stanislav Dubko and Head of Information Department – Ms. Marina
Protsenko.
General Director of National Rating Agency
Stanislav Dubko stated that rating system implementation in Ukraine has led to creation
of coordinate system for universal risk assessment and structuring of the financial
market according to risks, improvement of information disclosure standards concerning
borrowers, creation of comparable rating history of borrowers.
“We are sure that well-to-do companies with high rating will gain access to wider range
of investors, cheaper and long-term funds that allows to enhance the transparency of
economic performance and provide the financing of “economically viable projects”. Such
transparency provides the progressive advance of financial market without scandals at the
separate market segments, which put back market’s development,” - he mentioned at
briefing on Friday.
Summed up first quarter 2006 “Credit-Rating” agency results, S.Dubko said that for the
mentioned period the agency has assigned one credit rating in municipal sector (for the
same period in 2005 – 0), 5 ratings – in financial sector (last year - 1), and 34 –
in corporate sector (last year – 8). At the same time in the 1st quarter, the bonds
to which credit rating was assigned in municipal sector were not issued, whereas such
bonds in financial sector were issued to the amount of UAH 200 mln. and in corporate
sector – to the amount of UAH 1 billion 773 mln. –. “Generally, we can observe a lot of
ratings in corporate sector but most of them are of the speculative grade, that means the
non-performance of incurred obligations in time”, commented S.Dubko.
The General Director of agency also marked that the majority of ratings, 22 (64%), were
assigned in building sector, 4 (12%) ratings– in food industry, 3(9%) – in
machine-building and 3(9%) – in commerce. There are only 4 ratings of investment grade
among 102 ratings assigned to companies which raise funds to building projects. Thus,
only 30% of companies have the experience of investment-building projects realization.
Besides 35% of companies, which issued bonds, have licenses for building but they have no
track record in this sphere and projects of these companies are usually at the initial
stage. Along with it, 30% of companies start to place bonds without having
substantive building documentation that increases risks of non-performance of obligations
in due time and in full.
As to the financial matter of rating assignment, S. Dubko affirms, that rating assignment
in international agency costs almost three times more than in domestic. Besides,
according to him this process is longer abroad than in Ukraine where it takes two months
to analyze all the information. “This is very labor-intensive process”, he stated. The
rating assignment costs USD 10,000.00 for financial entities in Ukraine that is cheaper
than in world agencies.
“Credit-Rating” was established in 2001. The company is the only rating agency in Ukraine
specializing in issuer solvency assessment and assignment of credit ratings according to
the Ukrainian national scale. Since 2003 agency rating estimations are officially
recognized by Ministry of Finance of Ukraine. In 2004 “Credit-Rating” was authorized by
State Commission for Securities and Stock Market to assign ratings to transactor units,
industries and regions.
