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25.06.2007
Upcoming bond issue by Arsenal-rezerv assigned uaBB+ credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB+ (uaBB+) long-term credit rating to upcoming UAH99.8m issue of registered housing bonds (C-R series) due Dec. 31, 2011 by Zaporozhye-based Arsenal-rezerv LLC (`Issuer` or `company`). The company`s principal activity is investment and construction. Today the company implements 6 construction projects in city of Zaporozhye. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2004-2006 and 1Q2007 as well as other inside information furnished by the company.
A credit rating of uaBB is a speculative grade rating, indicating a debt liability that is the LEAST AFFECTED BY THE RISK OF NONPAYMENT of the principal and interest among speculative grade ratings. This rating indicates that the obligor may not be able to meet in full its commitments on the given debt liability on a timely basis in the event of adverse changes in the business, financial or economic conditions in the Ukrainian financial market environment. However, the possibility of nonpayment in the near future is considered to be low.
The plus (+) or minus (-) modifier denotes rating`s relative status within major categories .
Factors maintaining the credit rating
- The Issuer as an investor and customer has experience in investment and construction projects; in fact the company took part in construction and reconstruction of 6 residential buildings of 48.6K sq.m. floor area, with 34.4K sq.m. of it being financed by the Issuer.
- The Issuer has experience in redemption of A series bond issue of UAH7.7m par by 5.5K sq.m. of residential premises in 6, Paramonova str, Zaporozhye; the delay un maturity made up 32 days.
- The Issuer is involved in construction funding in city of Zaporozhye, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The exposure to risks which may incur under size of the project in Meditsinskaya str, city of Zaporozhye with its premises to be redeemed in upcoming bond issues, in fact the total floor area of residential buildings amounts to 34K sq.m. which is comparable with the overall volume of premises built with the Issuer`s participation. The works on site preparation is conducted as of May 1, 2007.
- Volatility in legislation and taxation on operations associated with construction and with attraction of funding.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found at 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
