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06.12.2007
Credit-Rating assigns Tiras`s upcoming bond issue uaB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB to UAH134m 2-year registered housing bonds (A-C series) to be issued by Odessa-based Manufacturing and Research Firm Tiras LLC (`Issuer` or `company`). The company`s primary activity is investing and construction. Today the company as a customer and investor constructs a residential building in the city of Odessa. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2006 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.
Factors maintaining the credit rating
- The planned bond issue is to be redeemed by premises in 5/2 Koroleva st., Odessa, which has been invested 11 per cent of the overall project value as of November-beginning 2007.
- The general contractor of the construction is Spetsstroymontazh-Yug LLC, which has built and reconstructed 6 buildings of 39.2K sq.m. with another 4 buildings of 58.6K sq.m. being on different construction stages.
- The Issuer is engaged with organizing and financing of construction in the city of Odessa, 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 housing bonds redemption.
- The planned issue size of UAH134m exceeds 8.6x the Issuer`s asset balance of UAH16m and 44x the Issuer`s equity of UAH3m as of Sep. 30, 2007.
- Issuer`s detrimental performance in 2005-2006 and 9M2007 with the uncovered loss amounting to UAH(-)1.2m as of Sep.30, 2007.
- 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
