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04.09.2007
Upcoming bond issue by Strakhovie Traditsii Financial Group assigned uaBBB- credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine, has today announced the assignment of uaBBB- long-term credit rating to UAH15m 3-year issue of registered interest bonds (A series) by the Kiev-based Strakhovie Traditsii Financial Group CJSC (`Issuer` or `Company`). In the course of analysis, Credit-Rating considered 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 uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by 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:
- Stable increase of insurance premiums collected by the Issuer: insurance premiums increased to UAH 47.2m in 2006 as compared to the year 2005 and a number of the insured-individuals increased from 41.5% to 49.9%;
- The Issuer`s equity exceeded the volume of gross insurance premiums (by 1.6% in 2006) and liabilities (by 3.3 times) that is evidence of high level of resources to support the increase of insurance services provided by the Issuer;
- Net insurance reserves amounted to 49.6% of the Issuer`s net equity according to the results of 2006 and they had appropriate level for further company`s development;
- Premiums, collected by the Issuer through the banking channels of insurance products sale, amounted to 45% according to the results of 2006.
Factors constraining a credit rating:
- Volume of the 10 biggest insurance premiums amounted to 39.5% of gross insurance premiums in 2006 that is evidence of significant level of concentration and of the Issuer`s dependency on the biggest clients; in the structure of the abovementioned premiums, the biggest premium had a 64.5% share;
- Slow growth of the Issuer`s assets by quarters of 2006 caused by the instability of cash;
- The Issuer operates in the riskiest and high-competitive niches of insurance market.
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
