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01.11.2007
Credit-Rating rates SVF KOLO`s bonds at uaB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned UAH20.2m 3-year registered housing bonds (C and D series) issued by Poltava-based SVF KOLO LLC (`Issuer` or `company`) a long-term credit rating of uaB+ (uaB plus). The company`s primary activity is investment and construction. Today the company as a customer and investor constructs a residential building in the city of Poltava. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2005-2006 and 1H2007 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 is incorporated with the group of companies with experience in investment and construction projects: 2006 saw a 9.3K sq.m. residential building constructed in 12, Lyakhova str. Poltava.
- The bond issue is to be redeemed by premises in 2nd stage of a residential building in 77A, Oktyabrskaya str. Poltava, with the construction readiness of the 1st stage making up 39 per cent.
- The Issuer is engaged with residential construction in the city of Poltava, 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 in bonds redemption.
- Issuer`s negative equity as of Dec. 31, 2006 and Jun. 30, 2007, undermined by company`s detrimental performance during the Issuer`s entire period of operation with the uncovered loss amounting to UAH712.5K.
- Issuer`s performance within the group of companies imposes risks of cash flow redistribution within the group neglecting Issuer`s interests and makes it vulnerable to the risk the whole group may encounter.
- 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
