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09.11.2007
Credit-Rating: Residential Construction Administration assigned uaB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB to Kiev-based Residential Construction Administration (`Issuer` or `company`) run by the State Special-purpose Financial Institution State Fund for Youth Residential Construction Aid. The company`s primary activity is investing and constructing. Today the company implements a number of construction projects in Volyn, Lugansk, Lviv, Odessa, Kharkiv, and Khmelnitskiy Regions. In the course of analysis Credit-Rating considered Issuer`s financial statements for 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 Issuer is subject to the State Special-purpose Financial Institution `State Fund for Youth Residential Construction Aid` being engaged with the state program aimed at assistance to youth residential construction, in the framework of which the Issuer is acting as investor. 2004-2006 and 1H2007 saw 3,066 apartments of 218.2K sq.m. delivered.
Factors constraining the credit rating
- The Issuer`s activities are vulnerable to risks of possible changes in the state policy of financing the youth residential construction and are constrained on the capital markets.
- Issuer`s negative equity as of Dec. 31, 2006 and of Jun. 30, 2007, entailed by Issuer`s detrimental performance over its entire period of operation; the Issuer`s uncovered loss amounted to UAH1.7m as of Jun. 30, 2007.
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
