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07.12.2007
Credit-Rating assigns Standart`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 UAH25m 9-year registered discount bonds (A series) to be issued by Kiev-based Standart LLC (`Issuer` or `company`). The company`s primary activity is construction, reconstruction and sale of residential and non-residential real estate. Today the company implements a number of projects on construction and reconstruction of real estate in the cities of Kiev and Mykolayiv. 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 Issuer enjoys experience in reconstruction and renovation of non-residential premises; in fact the Issuer has rendered services for UAH14.4m over 2003-2006.
- The Issuer is engaged with organizing and financing the construction in the cities of Kiev and Mykolayiv, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The redemption of the bonds is contingent upon successful completing the investment and construction projects, in which the Issuer has not had experience so far.
- The issue size of UAH25m exceeds over 3x the Issuer`s asset balance of UAH8m with the Issuer`s equity being negative of UAH(-)2.4m 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
