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09.07.2007
Bond issue by Progress-Stroy Invest LLC assigned uaCCC credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaCCC long-term credit rating to UAH18m 6-year issue of coupon bearer bonds (A-C series) by Odessa-based Progress-Stroy Invest LLC (`Issuer` or `company`). The company`s principal activity is investment and construction. Today the company implements 3 construction projects in the city of Odessa and in Odessa region. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2005-1Q2007 as well as other inside information furnished by the company.
A credit rating of uaCCC is a speculative-grade rating, indicating a debt liability with a DEFAULT POSSIBILITY, such that the obligor`s payment of principal and interest are substantially dependent upon favourable conditions in the business, financial or economic conditions in the Ukrainian financial market environment.
Factors maintaining the credit rating
- The Issuer is incorporated with the non-registered legally Progress-Stroy group of companies, which has a significant experience in construction, specifically the group has built 45 residential and non-residential buildings of over 300K sq.m. floor area with another 13 of over 500K sq.m. being currently under construction.
- The Issuer is involved in organizing and funding the residential and non-residential construction in the city of Odessa and Odessa region where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- High Issuer`s dependency upon Progress-Stroy group of companies, which performance is contingent upon size of projects and order portfolio, and is restrained by growing competition on Odessa construction market.
- The size of the planned issue exceeds the Issuer`s net sales in 2006 (the issue size is UAH18m, with the net sales being UAH7.6m)
- Issuer`s negative equity of UAH(-)146.3K as of March 31, 2007, called forth by company`s detrimental performance.
- The management structure of the Progress-Stroy group does not envisage consolidation of the financial results and of property, which prevents from proper assessment of the company`s performance and management quality.
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
