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10.07.2007
Bond issue by Kovalska Plant of Ferro-Concrete Constructions assigned uaBBB- credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB- (uaBBB minus) long-term credit rating to UAH36.8m 1 1/2-year issue of registered housing bonds (D, E series) by Kiev-based Kovalska Plant of Ferro-Concrete Constructions OJSC (`Issuer` or `company`). The company`s principal activity is production of ferro-concrete constructions and of central-mixed concrete, as well as investment and construction. Today the company takes part in 5 investment and construction projects in Kiev. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2001-2006 as well as other inside information furnished by the company.
A credit rating of uaBBB is an investment-grade rating, indicating an ADEQUATE CAPACITY of an obligor to pay both interest and principal on the given debt liability in the Ukrainian financial market environment. This rating indicates a level of creditworthiness that is more susceptible to adverse changes in commercial, financial and economic conditions than debt obligations with higher investment grade ratings. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- The Issuer is one of the leading Kiev region`s producers of construction materials, namely of central-mixed concrete, which 2006 production rates of 1.1m cubic meters have allowed the Issuer to achieve a 32% share of Kiev`s concrete market.
- The Issuer has an experience of a general contractor in investment and construction projects; today the Issuer as a customer and general contractor constructs a residential building in Kasiana str., Kiev, which construction readiness is currently 90%.
- Company`s key performance indicators have been growing over 2002-2006, in fact the Issuer`s assets grew 6.4x to UAH248m, the net sales grew 5.6x to UAH697.8m, with the net profit having risen 3.2x to UAH28.9m.
- The planned bond issue is underwritten by Kovalska Plant of Ferro-Concrete Constructions CJSC, which has experience in 4 large investment and construction projects in Kiev.
Factors constraining the credit rating
- The Issuer does not have experience in bonds` redemption.
- 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 in 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
