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25.12.2007
Credit-Rating assigns Bukovyna Invest-Bud`s upcoming bonds uaK4
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a short-term credit rating of uaK4 to UAH7.1m 6-month registered housing bonds to be issued by Chernivtsi-based Bukovyna Invest-Bud (`Issuer` or `company`). The company`s primary activity is investing and construction. Today the company constructs a residential complex in the city of Chernivtsi. 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 rated uaK4 is characterized with the LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. The obligor`s financial condition is insufficient to deter any foreseeable risks in the short-term period.
Factors maintaining the credit rating
- The Issuer is incorporated with the group of companies, that have experience in investment and construction projects, in fact the companies as customers and general contractors have built 8 residential houses of 23.1K sq.m. with another 3 buildings of 7.2K sq.m. being currently on the finalizing stage of construction.
- The planned bond issue is to be redeemed by premises in the residential complex based 116, Nezalezhnosti Av., city of Chernivtsi, which construction readiness made up 34 per cent as of Nov. 1, 2007, with UAH3.6m invested (51 per cent of the project value).
- The Issuer is engaged with organizing and financing the residential construction in the city of Chernivtsi, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The building to be complete and the proprietary rights for the premises to redeem the A series bonds, as well as Issuer`s corporate rights are under lien on a banking loan.
- The Issuer does not have experience in housing bonds redemption.
- Issuer`s negative equity in 2005, 2006 and at end 3Q2007, in fact it accounted for UAH(-)98.2K as of Sep. 30, 2007.
- The Issuer shares the risks the entire group is exposed to.
- 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
