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01.10.2007
Credit-Rating assigns uaB- rating to CIC TM`s upcoming bond issue
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned uaB- (uaB minus) long-term credit rating to UAH200m 10-year issue of registered discount bonds (A series) by Kiev-based Construction and Investment Company TM (`Issuer` or `company`). The company`s primary activity is investment and construction. Today the company implements two investment and construction projects in the city of Kiev and in the borough of Lyuta, Zakarpatska Oblast. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2004-2006 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. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- The Issuer as a customer and investor implements two investment and construction projects, specifically the reconstruction of Kiev-based Olimpiyskyi National Sport Complex, with the construction readiness of the 1 st stage making up a. 45 per cent financed 17 per cent of the project estimated value.
- The Issuer is engaged in residential and recreational construction in Kiev and Zakarpatska Oblast, where real estate prices and demand have remained buoyant.
Factors constraining the credit rating
- The issue size of UAH200m exceeds significantly Issuer`s assets of UAH12.8m as of June 30, 2007.
- Issuer`s negative equity of UAH1.8K as of Dec.31, 2006 and of June 30, 2007, being bolstered by company`s detrimental performance in 2006.
- The redemption of the bonds is contingent upon successful implementation of the projects, yet the Issuer does not have experience in this.
- Instability in legislation and tax environment controlling both the construction industry and project financing.
Information on all 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
