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25.02.2008
Credit-Rating assigns Krug-budinvest`s upcoming bond issue uaBBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaBBB to UAH24.2m 3-year registered housing bonds (A-C series) to be issued by Cherkassy-based Krug-budinvest LLC (`Issuer` or `company`). The company`s principal activity is investing and construction. Today the company as a customer and investor constructs a residential building with installed facilities (1st phase) located in the city of Cherkassy. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2006 and 9M2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.
Factors maintaining the credit rating
- The Issuer is incorporated with the Krug group of companies, which has experience in investment and construction: it has delivered 3 buildings of 15.6K sq.m. floor area, with one of them financed with the funds raised from a housing bond issuance being already redeemed (the customers got apartments of 7,129.32 sq.m floor area). Another building of 7.1K sq.m. is being poised to be delivered.
- The group of companies owns production facilities, which empower the group to supply the construction process on almost all stages.
Factors constraining the credit rating
- Issuer`s extreme dependency upon the Krug group of companies accompanied by company`s vulnerability to redistribution of cash flows within the group neglecting Issuer`s interests.
- 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
