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14.11.2007
Credit-Rating: Ekoinvestbud`s upcoming bond issue assigned uaB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term rating of uaB+ (uaB plus) to UAH50.9m 3-year registered housing bonds (A series) to be issued by Kiev-based Ekoinvestbud LLC (`Issuer` or `company`). The company`s primary activity is investing and construction. Today the Issuer as a customer constructs the 1st stage of Brest-Litovskyi residential complex based in the borough of Tchaiki, in Kiev-Svyatoshin district of Kiev Oblast. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2004-2006 and 9M2007 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 bond issue will be redeemed by `A` and `B` residential blocks in the residential complex mentioned above, which as at October 2007-beginning has been invested UAH28.1m or 8 per cent of the overall project value.
- The general contractor of the project is the State Construction Combine run by Verkhovna Rada (Parliament) Administration, which has built over 232K sq.m. of residential and 61K sq.m. of non-residential premises.
- The Issuer is engaged with organizing and financing the residential and commercial real estate construction in Kiev Oblast, where real estate prices and demand have been growing in line with those in the city of Kiev.
Factors constraining the credit rating
- The Issuer does not have experience in investment and construction projects, neither in bonds redemption.
- The planned issue size of UAH50.9m exceeds 6.4x Issuer`s equity of UAH7.9m as of Sep. 30, 2007.
- The land plot the residential complex to be built on is mortgaged under a bank loan.
- 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
