print
12.12.2007
Credit-Rating assigns Regional Construction Investments`s bond issue uaB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB to UAH291.6m 2-year registered housing bonds to be issued by Kiev Oblast-based Regional Construction Investments LLC (`Issuer` or `company`). The company`s primary activity is investing and construction. Today the company constructs multistoried residential buildings with social facilities and multilevel parking in the borough of Kotsyubinske, Kiev Oblast. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2006 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 bond issue is to be redeemed by premises in multistoried residential buildings situated 26, Ponomaryova str., borough of Kotsyubinske, Kiev Oblast, which construction has been invested UAH100.3m or 22.1 per cent of the project estimated cost.
- The Issuer is engaged with investing and construction in Kiev suburbs, 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 investing and construction projects, neither in housing bonds redemption.
- The land plot of 4.47 ha, the tenancy rights for the land plot of 0.68 ha and the proprietary rights for the building under construction, which premises are to redeem the bonds, are under lien on a bank loan.
- The size of two bond issues of UAH392m exceeds 1.9x the Issuer`s assets of UAH211.3m and 19.7x the Issuer`s equity of UAH19.9m as of 1 Oct. 2007.
- Issuer`s detrimental performance in the past few years with the uncovered loss amounting to UAH9.6m as of 1 Oct. 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
