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06.11.2007
Credit-Rating rates Budspetsservice`s bonds at uaB-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned UAH113.2m 3-year registered housing bonds issued by Kiev-based Budspetsservice LLC (`Issuer` or `company`) a long-term credit rating of uaB- (uaB minus). The company`s primary activity is investing and constructing. Today the company constructs a residential block with social facilities in the city of Kiev. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2006 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.
Factors maintaining the credit rating
- The bond issue is to be redeemed by premises in the bilding #3, Podvisotskogo str., city of Kiev which has been invested 15 per cent of the project estimated value as of Sep. 3, 2007.
- The Issuer is engaged with residential and non-residential construction in Kiev centre, where real estate prices and demand remain stably high.
Factors constraining the credit rating
- The Issuer does not have experience of a customer in investment and construction projects, neither in bonds` redemption.
- Issuer`s detrimental performance in 2004-2006 and 1H2007 with the uncovered loss making up UAH6m as of Jun. 30, 2007.
- The issue size of UAH113.2m exceeds 2.5x Issuer`s equity of UAH45.8m as of Jun.30, 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
