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13.12.2007
Credit-Rating assigns Budspetsservice`s upcoming bonds uaB-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB- (uaB minus) to UAH169.4m 3-year registered discount bonds (N-S series) to be issued by Kiev-based Budspetsservice LLC (`Issuer` or `company`). The company`s primary activity is investing and constructing. Today the company constructs a residential block with social facilities in the city of Kiev. 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. 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 residential buildings situated Podvisotskogo ##4 and 1, city of Kiev, which construction has been invested over 10 per cent of the total investment size.
- The Issuer is engaged with organizing and financing of residential and non-residential premises in Kiev`s centre, 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 of a customer in investment and construction projects, neither in housing bonds redemption.
- Issuer`s detrimental performance in 2004-2006 and 9M2007 with the uncovered loss amounting to UAH6.5m as of Sep. 30, 2007.
- The face size of 5 bond issuances including the upcoming one (all UAH643.2m) exceeds 12.7x the Issuer`s equity of UAH50.6m 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
