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06.06.2007
Bond issue by SOFOR assigned uaB+ credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB+ (uaB plus) long-term credit rating to the issue of registered housing bonds (A-X series) by Odessa-based SOFOR LLC (`Issuer` or `company`) for the amount of UAH39.9m of the 7-month original maturity to be redeemed within 12 months. The main company`s activity is investment and construction. Today the company constructs a residential complex in the borough of Tchernomorskoye (Odessa Oblast). In the course of analysis Credit-Rating used Issuer`s financial statements for 2002-2006 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. The + and - modifiers denote rating`s relative status within major categories .
Factors maintaining the credit rating
- The planned bond issue is to be redeemed by premises in residential complex based in the borough of Tchernomorskoye (Komintern district of Odessa Oblast) which construction readiness was 90% as of Apr. 23, 2007 with the investments herein amounting to 92%.
- The Issuer is involved in residential construction in the Odessa`s recreational suburbs, 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 residential construction, neither in bonds` redemption.
- Issuer`s negative equity during 2002-2006 and 1Q2007 having amounted to
UAH -15.5m as of March 31, 2007. - The planned issue size of UAH39.9m 23% exceeds Issuer`s asset balance of UAH32.5m as of March 31, 2007.
- 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
