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24.05.2007
Upcoming bond issue by Poltavamotorservis assigned uaB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB long-term credit rating to the upcoming issue of registered housing bonds (A, B series) by Poltava-based Poltavamotorservis PE (`Issuer` or `company`) for the amount of UAH 19m due Sep. 30, 2008. The main company`s activity is sale of cars manufactured by Mazda and Suzuki. Today the company reconstructs a hostel to a residential house based in the borough of Gurzuf (Crimea). In the course of analysis Credit-Rating used Issuer`s financial statements for 2004-2006 and 1Q2007 as well as other inside information furnished by the company.
The uaB issue rating reflects higher default possibility than of the uaBB rating, though in this case the obligor`s capacity is adequate to pay its obligations in the Ukrainian financial market environment. This debt liability is more affected by the adverse changes in business, financial and economic conditions than debt liabilities with higher ratings. That may negatively affect the obligor`s capacity and willingness to fully and timely pay interest and principal on obligations.
Factors maintaining the credit rating
- The planned bond issue is to be redeemed by premises in residential building on
4, Artekovskaya str. (Gurzuf) which reconstruction has already been invested UAH 8m (purchase of the building and obtaining the licenses), amounting to 30% of the overall volume of financing. - The Issuer is also involved in selling and servicing Mazda and Suzuki cars, allowing for diversification of income sources, specifically 2006 saw UAH 18.9m net sales gained from this activity.
- The Issuer is involved in construction business on the southern coast of Crimea, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The Issuer does not have experience in investment and construction projects, neither in bonds` redemption.
- The reconstruction works on the above building has not been commenced yet, with the planned term of setting in operation being 1Q2008.
- Volatility in legislation and taxation on operations connected with construction and with attraction of funding.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS, BLOOMBERG and FTN MONITOR information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
