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12.09.2007
Upcoming issue of FREO certificates by MASTER FINANCE LLC assigned uaB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB long-term credit rating to upcoming UAH80m issue of Zapadnaya Stena FREO (Fund on Real Estate Operations) certificates (A and B series) by Dnepropetrovsk-based MASTER FINANCE LLC (`Issuer` or `company`), with original maturity of A series being 4 years, of B series being 3 years. The company`s principal activity is establishing FREO for financing the construction of Dnepropetrovsk-based Zapadnaya Stena residential complex. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2006 and 1H2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaB credit rating is characterized with the 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.
Factors maintaining the credit rating
The Issuer cooperates with more than 10 Dnepropetrovsk-based companies which are amalgamated under MASTER brand and are engaged mainly with trade and investments. The companies participated in construction of residential buildings of 33K+ sq.m. total floor area in Denpropetrovsk and of trade centres of 27K+ sq.m. in 8 oblast centres, as well as of hotels.
- Komeks LLC is the customer of Zapadnaya Stena residential complex (of the 1 st stage in 1 st phase), which timely and full construction affects Issuer`s capacity on meeting its obligations for the planned issuance of FREO certificates. Komeks LLC has experience of a customer in constructing a building of 11.2K sq.m.
- The Issuer is involved in construction of residential and non-residential premises in the city of Dnepropetrovsk, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The Issuer does not have experience of FREO manager in attracting funds.
- The construction of Zapadnaya Stena residential complex (of the 1 st stage in 1 st phase) is currently on coordination of permitting documents.
- The FREO certificates have not been widespread in Ukraine as a real estate leverage, which may impose the risks of Issuer`s failure in meeting its obligation with regard to financing the construction in full.
- 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
