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05.11.2007
Credit-Rating assigns DNIPROZHYLBUD`s bonds uaB-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned UAH82.8m 2 Ѕ-year registered housing bonds (B-U series) issued by Kiev-based DNIPROZHYLBUD CJSC (`Issuer` or `company`) a long-term credit rating of uaB- (uaB minus) carrying Developing outlook. The company`s primary activity is investment and construction. Today the company constructs 2 residential districts in the city of Vyshgorog, Kiev Oblast. 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 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.
A `Developing` outlook indicates that there is a high possibility for a rating to be changed in the course of the year.
Factors maintaining the credit rating
- The bond issue is to be redeemed by premises in residential district situated 2, Shevchenko blvd., city of Vyshgorod with UAH7.1m or 3.5 per cent of the project estimated value invested as of Jul.1, 2007.
- The Issuer is engaged with investing and constructing in the city of Vyshgorog, Kiev Oblast, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- Issuer`s information intransparency and closeness.
- The Issuer does not have experience in investment and construction projects, neither in bonds` redemption: as of Sep. 1, 2007 there is a 8-month delay in delivering residential premises in 3, Shevchenko Sq., Vyshgorod for redemption of A series bonds.
- Issuer`s liabilities on UAH82.8m bond issue over 2x exceed Issuer`s asset balance of UAH39.5 and over 30x exceed Issuer`s equity of UAH4m as of Jul. 1, 2007.
- 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
