print
01.08.2007
Bond issue by PRYVAT-ZHYTLO-YUG assigned uaB+ credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB+ (uaB plus) long-term credit rating to UAH43m 2.5 year issue of registered housing bonds (A-D series) by Nikolayev-based PRYVAT-ZHYTLO-YUG LLC ('Issuer' or 'company'). The company's primary activity is investment and construction. Today the company constructs a 9-storied residential building in the city of Nikolayev. 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. The plus (+) or minus (-) modifier denotes ratings relative status within major categories.
Factors maintaining the credit rating:
- The planned issue is to be redeemed by residential premises in 17, Mostostroiteley Str., the city of Nikolayev. The construction readiness of the building is 30% and 80% of the building framework as of May 29, 2007;
- The Issuer is involved in residential construction in the city of Nikolayev, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating:
- The Issuer does not have experience in residential construction, neither in bonds redemption:
- The Issuer is completely dependant upon its financial obligations, which specific gravity in Issuer's liabilities makes up as much as 100%, coupled with the unavailability of any other income sources:
- Issuer's negative equity, which amounted to UAH(-)8K and UAH(-)11K as of Dec. 31, 2006 and of March 31, 2007 respectively:
- The planned issue size of UAH43m exceeds 59% Issuer's asset balance of UAH27m as of March 31, 2007:
- 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
