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06.12.2007
Credit-Rating rates OFPRODIV`s bond issue at uaB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB+ (uaB plus) to UAH116.7m 3-year registered housing bonds (A-D series) issued by Kiev-based OFPRODIV LLC (`Issuer` or `company`). The company`s primary activity is investing and construction. Today the company as a customer and investor constructs a residential complex with installed commercial and office premises and underground parking in the city of Kiev. 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. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- The planned bond issue is to be redeemed by premises in the building in 26A, Zaporozhtsya str., Kiev with a.30 per cent readiness and UAH24.9m invested.
- The general contractor of the construction is incorporated with the group of companies experienced in delivering residential and non-residential real estate.
- The Issuer is engaged with organizing and financing the construction in the city of Kiev, where real estate prices and demand have been growing over the past few years.
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 UAH116.7m exceeds 6.1x the Issuer`s assets of UAH19.1m as of Jun. 30, 2007.
- Issuer`s negative equity of UAH192.3K as of Jun. 30, 2007 entailed by Issuer`s detrimental performance with the uncovered loss amounting to UAH212.8K.
- 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
