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13.08.2007
Bond issue by NIKA LTD assigned uaB- credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB- (uaB minus) long-term credit rating to UAH98.6m 1 Ѕ-year issue of registered housing bonds (A-E series) by Kiev-based NIKA LTD LLC (`Issuer` or `company`). The company`s primary activity is investment and construction. Today the company constructs a residential building in the city of Vyshgorod, in Kiev Oblast. 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 rating`s relative status within major categories.
Factors maintaining the credit rating:
- The planned issue is to be redeemed by apartments in the residential building in 4A, Simonenko str, the city of Vyshgorod, which has already been invested 11% of overall size of funding (the Issuer acquired houses on the to-be site and removed inhabitants).
- The Issuer is engaged with residential construction in Kiev`s suburb the city of Vyshgorod, where growth in real estate prices and demand is in line with that in Kiev.
Factors constraining the credit rating:
- The Issuer does not have experience in investment and construction projects, neither in bonds` redemption.
- The planned issue size of UAH98.6m 10.6x exceeds Issuer`s assets of UAH9.3m as of March 31, 2007.
- Issuer`s negative equity of UAH(-)89.5K as of March 31, 2007, which is entailed by Issuer`s detrimental performance during 2005-2006 and 1Q2007.
- 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
