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13.08.2007
Issue of certificates by Arkada Bank assigned uaK2 credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaK2 short-term credit rating to UAH28.7m 1-year issue of certificates of Real Estate Operations Fund (`CREOF`) (A series) operated by Kiev-based Arkada JSCB (`Bank`). In the course of analysis Credit-Rating considered Bank`s financial statements for 2004-2006 and 5M2007 as well as other inside information furnished by the Bank.
A credit rating of uaK2 is a short-term, investment grade rating, indicating a STRONG CAPACITY to pay both interest and principal on the given debt liability on a timely basis and in full, as the cash flows and liquidity of the obligor are adequate to deter any foreseeable risks.
Factors maintaining the credit rating:
- The participants of construction of the first stage of Novaya Bogdanovka housing block, which timely and full implementation affects the meeting commitments on the obligation are associated with the Kyivmiskbud Joint-Stock Holding Company, which is the leading construction company in the city of Kiev having at its disposal production facilities allowing for supplying the construction process on almost all stages.
- Being the fund manager, the Bank has experience in attraction of individuals` funds for construction financing, in fact the Bank has established 17 funds for construction financing, which have attracted UAH4.7bn with 77% of them being attracted on Kyivmiskbud`s program.
- The Bank is engaged with construction of cottage village in Boryspil district of Kiev oblast (in the borough of Bogdanovka), where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating:
- The CREOF have not been widespread in Ukraine as a real estate leverage, which may impose risks of Bank`s failure in meeting in full its commitments on the obligations.
- 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
