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29.11.2007
Credit-Rating assigns Veter Aprelya`s upcoming bonds uaB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB to UAH25m 9-year registered coupon bonds (B-F series) to be issued by Crimea-based Veter Aprelya LLC (`Issuer` or `company`). The company`s primary activity is investing and construction. Today the company as investor implements investment and construction project aimed at building of hellings for small vessels in the borough of Ordzhonikidze (the Autonomous Republic of Crimea). In the course of analysis Credit-Rating considered Issuer`s financial statements for 2004-2006 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 funds raised from the bonds` placement are to be aimed at implementation of the planned non-residential construction projects on the southern coast of Crimea, where real estate prices and demand have been growing over the past few years.
- The Issuer enjoys experience in investment and construction projects, in fact the Issuer as a co-investor with Ukrsotsstroy LLC and Stroybat LLC, which both have experience in two projects (5,871 sq.m. delivered), participates in construction of hellings in the borough of Ordzhonikidze being currently on the final stage.
Factors constraining the credit rating
- The planned issue size of UAH25m exceeds 4.1x the Issuer`s assets of UAH5.9m as of Jun. 30, 2007 and almost 190x the Issuer`s equity of UAH0.1m.
- The issue parameters, namely 9-year original maturity, 12% annual coupon paid at maturity, are not commensurate with usual parameters for issuances of coupon bonds.
- The Issuer suffers from unavailability of stable income sources accompanied by Issuer`s detrimental performance in 2006 and 1H2007, with the uncovered loss making up UAH(-)1,663.2K.
- Instability in legislation and tax environment controlling both the construction industry and project financing.
Information on all credit ratings assigned in accordance with the National Scale may be found in REUTERS, BLOOMBERG and FTN MONITOR information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
