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15.10.2007
Credit-Rating rates FREO certificates by Arkada Bank at uaK2
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned UAH50.5m 1-year issue of FREO (Fund for Real Estate Operations) certificates Novaya Bohdanivka-2 (A series) managed by Kiev-based Arkada Joint-Stock Commercial Bank (`Bank`). The funds raised from the certificates placement will be aimed at financing the 2nd stage of construction of Nova Bohdanivka cottage village in the borough of Bohdanivka, Brovary District, Kiev Oblast. In the course of analysis Credit-Rating considered Bank`s financial statements for 2004-2006 and 1H2007 as well as other inside information furnished by the company.
An obligor or a debt liability bearing uaK2 short-term rating is characterized with the HIGH creditworthiness as compared to other Ukrainian obligors or debt liabilities. The obligor`s financial condition is adequately high to deter any foreseeable risks in the short-term period.
Factors maintaining the credit rating
- The construction participants of the 2nd stage of Nova Bohdanivka residential district, which successful and timely implementation affects Issuer`s meeting its commitments on the liability are associated with Kyivmiskbud Holding Company, which is the leading construction company in Kiev, operating facilities which enable the company to supply the construction on all stages.
- The Bank (the fund manager) has experience of fund manager in attracting funds of private and legal persons for construction funding, in fact the Bank established 19 funds for construction financing (`FCF`), which have been invested UAH4.6bn, with 75.6 per cent of these funds by Kyivmiskbud`s programme.
- The Bank takes part in construction of the cottage village in Brovary District of Kiev Oblast, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The FREO certificates have not been widespread in Ukraine as a real estate leverage, which may impose risks of Bank`s failure in meeting in full its commitments on the obligations.
- 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
