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16.08.2007
Bond issue by Bastma Brokerage Firm 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 24.3m 10 year issue of registered interest bonds (C series) by the Odessa-based Bastma Brokerage Firm 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 residential complexes in the city of Odessa. In the course of analysis, Credit-Rating considered the Issuer`s financial statements for 2003-2006 and 1Q2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaB credit rating is characterized with LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is extremely susceptible to adverse changes in commercial, financial and economic conditions. A plus + and a minus - signs indicate intermediary categories (grades) compared to the standard categories (grades).
Factors maintaining a credit rating:
- Growth of the Issuer`s performance indicators over 2004-1Q2007, namely: the company`s assets increased from UAH 192 300 to UAH 33.4m, equity increased from UAH 2 000 to UAH 2.6m; over 2003-2006 net sales increased by 31.5 and amounted to UAH 14m;
- The Issuer is involved in residential construction in the city of Odessa, where the prices and demand have been growing over the past few years.
Factors constraining a credit rating:
- As of March 31, 2007, the planned bond issue (UAH 24.3m) exceeded the Issuer`s equity by 10 times and the 2006 net income by 75%;
- As of March 31, 2007, the uncovered loss amounted to UAH (-) 450 000;
- Parameters of the planned bond issue (original maturity is 10 years and interest rate of 0.001% is fixed for the whole original maturity term) do not meet the typical parameters of interest bond issue;
- 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
