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24.01.2008
Credit-Rating`s assigns Zhylbud-Invest-K`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 UAH140.4m 2-year registered housing bonds (B-D series) to be issued by Odessa-based Zhylbud-Invest-K LLC (`Issuer` or `company`). The company`s primary activity is investing and construction. Today the company as investor and contractor constructs a multistoried residential complex with installed facilities and underground parking garage in the city of Odessa. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2004-2006 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 planned bond issue is to be redeemed by premises in the residential complex situated 11, Armeyskaya st., Odessa, which construction readiness is a. 21 per cent as of Dec. 26, 2007 with UAH44.2m invested.
- The Issuer is engaged with organizing and financing the construction of residential and commercial premises in Odessa, where real estate prices and demand remain stably high.
Factors constraining the credit rating
- The Issuer does not have experience in investment and construction projects, neither in housing bonds redemption.
- The planned issued size of UAH140.4m exceeds 1.4x Issuer`s assets as of Sep. 30, 2007, which 66.7 per cent are constituted of unsold A series housing bonds.
- Issuer`s detrimental performance in 2005-2006 and 9M2007 with the uncovered loss amounting to UAH4.9m as of Sep. 30, 2007.
- The planned bond issue is to be redeemed by premises in the residential complex, the proprietary rights for which are liened under a bank 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 Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
