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04.06.2007
Bond issue by Zhovtnevyi-14 assigned at uaBB
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB long-term credit rating to the issue of registered housing bonds (A, B, C series) by Dnepropetrovsk-based Zhovtnevyi-14 LLC (`Issuer` or `company`) for the amount of UAH39.6m with the 2 1/2-year original maturity. The main company`s activity is residential construction. Today the company implements an investment and construction project in the city of Dnepropetrovsk. In the course of analysis Credit-Rating used Issuer`s financial statements for 2002-2006 as well as other inside information furnished by the company.
Issues rated uaBB are the least affected by the risk of non-payment of the principal and interest within the speculative grade. The obligor, however, may be impaired to timely and in full meet its commitments on the obligation in the Ukrainian financial market environment in the event of adverse changes in business, financial and economic conditions. However, the possibility of nonpayment is low in the near future.
Factors maintaining the credit rating
- The Issuer as a customer, investor and general contractor has experience in construction of residential and non-residential premises of 6.8K sq.m. total floor area.
- The planned bond issue is to be redeemed by apartments in the residential and trade complex in 21, Voroshilova str, Dnepropetrovsk, which constriction readiness is 61% as of Apr.19, 2007.
- The Issuer is involved in organizing and financing the construction of residential and commercial premises in the city of Dnepropetrovsk, 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 bonds` redemption.
- The planned issue size 2.2x exceeds Issuer`s assets as of Dec. 31, 2006 of UAH17.7m
- Issuer`s negative equity during 2004-2006 having amounted to
UAH-2.3m, called forth by company`s detrimental performance. - 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
