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14.09.2007
Bond issue by Grado LLC assigned uaBB- credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of uaBB- (uaBB minus) long-term credit rating to UAH26.9m 2-year issue of registered housing bonds (A-H series) by Kharkiv-based Grado LLC (`Issuer` or `company`). The company`s principal activity is investment and construction. Today the company constructs 2 residential buildings in Kharkiv`s suburbs. 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 uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories .
Factors maintaining the credit rating
- The Issuer has experience in investment and construction projects, in fact the Issuer has built 3 residential houses of over 5.2K sq.m.
- The Issuer is involved in residential construction in Kharkiv`s suburbs, where growth in real estate prices and demand are in line with those in the city.
Factors constraining the credit rating
- The Issuer does not have experience in bonds` redemption.
- The bond issues are to be redeemed by apartments in the residential buildings being on the initial stage of construction.
- The issue size of UAH26.9m more than two times exceeds Issuer`s assets of UAH11.2m as of March 31, 2007 with the equity of UAH(-)33.4K being negative.
- Instability in 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 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
