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06.08.2007
Bond issue by Trest Zhytlobud-1 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 UAH51m 9-year issue of registered discount bonds (K2 series) by Kharkiv-based Trest Zhytlobud-1 OJSC ('Issuer' or 'company'). Outlook on the rating is Positive. The company's primary activity is investment and construction. Today the company implements 12 construction projects in the city of Kharkiv. 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.
Positive outlook indicates that there is a possibility to upgrade the rating in the course of the year, on the condition that positive tendencies are maintained and that current risks are reduced.
Factors maintaining the credit rating:
- The Issuer has experience in conduction of construction works and in residential construction, in fact the company has unveiled over 250K sq.m of residential premises during the past 10 years, with 56.5K of them constructed in 2006;
- The Issuer has at its disposal production facilities and structural subdivisions allowing for supplying the construction process on almost all stages;
- Issuer profitable performance in 2002-2006 and 1Q2007, specifically the Issuer recorded an undistributed profit of UAH46.9m as of March 31, 2007;
- Issuer's skilful management, which has great experience in construction industry and in the company;
- The Issuer is involved in organizing and financing the construction of residential and commercial premises in the city of Kharkiv, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating:
- Dependency of Issuer's performance upon size of projects and order portfolio, which are constrained to name a few by severe competition on the construction market;
- 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
