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14.08.2007
Bond issue by Zhytomir Privatbud LLC assigned uaB+ credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of uaB+ long-term credit rating to UAH 19.3m 2.5 year issue of registered housing bonds (A-B series) by Zhitomir-based Zhitomir Privatbud LLC (`Issuer` or `Company`). The company`s principal business is investment and construction. At present, the company carries out a project for the construction of an apartment building in the city of Zhitomir. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2005-2006 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. A plus "+" and a minus "-" signs indicate intermediary categories that are more favourably compared to the standard category.
Factors maintaining a credit rating:
- The housing bonds will be redeemed by giving appropriate residential and business
premises in the apartment building located at
99 Pobedy Str., Zhitomir to their owners. As of June 14, 2007, the building was 75% completed and the investment volumes was 87% of the construction budget; - The Issuer is involved in residential construction in the city of Zhitomir, where prices and demand have been growing over the past few years.
Factors constraining a credit rating:
- The Issuer has no experience both in residential construction and in redemption of bonds by giving premises to their owners;
- The Issuer depends on the financial liabilities the amount of which exceeds the balance sheet total by 7% as of March 31, 2007. The issuer has no stable sources of revenues;
- The Issuer`s equity had a negative value over 2005-2006 and 1Q2007 and amounted to UAH (-) 1.7m as of March 31, 2007;
- Instability of legislation and tax environment controlling both the construction industry and project financing.
Information on all the credit ratings, assigned in accordance with the Ukrainian National Scale, may be found in the 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
