print
30.07.2007
Upcoming bond issue by National Construction Company assigned uaB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB long-term credit rating to the upcoming UAH500m 10-year issue of registered discount bonds (G-K series) by Kiev-based National Construction Company CJSC ('Issuer' or 'company'). The company's primary activity is investment and construction. Today the company implements projects on construction of multi-apartment residential buildings in the city of Kiev. 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 uaB is a speculative grade rating, indicating a debt liability that has a HIGHER DEFAULT POSSIBILITY on the payment of principal and interest than a uaBB rating. This rating indicates that adverse changes in the business, financial or economic conditions in the Ukrainian financial market environment may negatively affect the obligor's capacity and willingness to meet in full its commitments on the given debt liability.
Factors maintaining the credit rating:
- The Issuer has experience in construction projects, in fact the company as an investor and general contractor has constructed 4 sections of the 25K+ sq.m. residential building #6, in Svyatoshin district of Kiev. The current year should see 3 sections of the building #6 constructed (with the current construction readiness of 50-55%) and 6 sections of the building #28 (with the current construction readiness of 80-85%) in the same district.
- The Issuer operates own production facilities allowing for supplying the construction process on almost all stages and for partial supplying the construction with the own-made materials.
- The Issuer is involved in construction in the city of Kiev, where real estate prices and demand have been growing over the past 5 years.
Factors constraining the credit rating:
- The planned bond issue size of UAH500m exceeds significantly Issuer's equity of UAH905.2K and asset balance of UAH87.2m as of March 31, 2007.
- Issuer's performance is dependant upon size of projects and order portfolio, which are constrained by growing competition, to name a few.
- 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
