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18.07.2007
Bond issue by Spetsbudmontazh assigned uaBBB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB long-term credit rating to UAH70m issue of registered coupon bonds (B and C series) by Kharkiv-based Spetsbudmontazh CJSC (Issuer or Company) with the original maturity of 4 years for the B series and of 5 years for the C series. The company's primary activity is investment and construction. Today the Issuer conducts construction works on 20+ sites in different regions of Ukraine. In the course of analysis Credit-Rating considered Issuer's financial statements for 2002-2006 and 1Q2007 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.
Factors maintaining the credit rating:
- The Issuer has operated since 1999 being one of the Kharkiv region's leaders in industrial, commercial and residential construction; in fact the company has rendered services for the amount of UAH545.7m having built a number of industrial objects and 7 residential buildings of 61.7K sq.m. total floor area;
- The Issuer has production facilities and structural subdivisions allowing for supply the construction process on almost all stages and partially providing the construction with the own-made materials;
- The planned issue size of UAH70m is 140% covered with the Issuer's authorized stock of UAH98.1m;
- The Issuer has an order portfolio scheduled through mid-2009 of over UAH345m estimated value; specifically the Issuer is planning to build a number of industrial, commercial and residential buildings of over 200K sq.m;
- Highly-professional Issuer's management, which has a significant experience in construction and in industry.
Factors constraining the credit rating:
- Unstable Issuer's performance indicators during the past 3 years, namely of net profit;
- The Issuer is incorporated with Avantazh legally informal group of companies, which may impose risks of redistribution of the production facilities and of cash flows within this group, neglecting Issuer's interests, which makes the company vulnerable to the risks the entire Avantazh group of companies is exposed to;
- Volatility in legislation and taxation on operations associated with construction and with cash attraction.
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
