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18.12.2007
Credit-Rating assigns Budspetsservice`s bond issue uaB-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaB- (uaB minus) to registered housing bonds (H-J and K-M series) issued by Kiev-based Budspetsservice LLC (`Issuer` or `company`). The issue size is UAH112m and UAH121.5m respectively to the series given, with 1 Ѕ-year original maturity. The company`s primary activity is investing and construction. Today the company constructs a residential district with social and household 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 bond issues are to be redeemed by premises in ## 2 and 5, Podvisotskogo str., city of Kiev, which have been invested about 10 and 16 per cent of overall value respectively.
- The Issuer is engaged with organizing and funding the construction of residential and commercial premises in Kiev`s centre, where real estate prices and demand have been stably high.
Factors constraining the credit rating
- The Issuer does not have experience of a customer in investment and construction projects, neither in bonds redemption.
- Issuer`s detrimental performance in 2004-2006 and 9M2007 with the uncovered loss making up UAH6.5m as of Sep. 30, 2007.
- The face size of four bond issues of UAH473.8m exceeds 9.4x the Issuer`s equity of UAH50.6m as of Sep. 30, 2007.
- The proprietary rights for the residential premises and parking lots in the residential building situated 5, Podvisotskogo str., Kiev which are to redeem the bond issue are currently under lien on a banking loan.
- 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 and BLOOMBERG information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
