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12.11.2007
Credit-Rating: Budspetsservice`s upcoming bond issue assigned uaB-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB- (uaB minus) to UAH127m 10-year registered discount bonds (D-G series) to be issued by Kiev-based Budspetsservice LLC (`Issuer` or `company`). 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. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- The Issuer as a customer constructs a residential block with social facilities in Podvisotskogo str., Kiev, which has been invested a. UAH170m as of October 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 nominal size of 2 bond issues of UAH240.3m, including the upcoming one, exceeds 31 per cent Issuer`s assets and 5.2x exceeds the Issuer`s equity as of Jun. 30, 2007 (UAH183.4m and UAH45.8m respectively).
- Issuer`s detrimental performance in 2004-2006 and 1H2007 with the uncovered loss making up UAH6m as of Jun. 30, 2007.
- The cash flow generation as bonds mature is contingent upon successful implementation of investment and construction projects, though the issuer does not have such an experience. .
- 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
