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17.03.2008
Credit-Rating assigns LIKO-HOLDING`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+ (uaBBB plus) to UAH727.2m 5-year registered housing bonds (AD-AZ series) to be issued by Kiev-based LIKO-HOLDING LLC (`Issuer` or `company`). The company`s principal activity is investing and construction. Today the company constructs residential buildings with underground parking garages and social facilities located in the city of Kiev. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2006 and 9M2007 and its other inside information.
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. A plus `+` and a minus `-` signs indicate intermediary categories compared to the standard categories (grades).
A “Negative” outlook indicates that there is a possibility to downgrade the rating in the course of the year, on the condition that negative tendencies are maintained and that current risks are realized.
Factors maintaining the credit rating
- The Issuer has experience in financing the construction with the funds raised from bond issuances, as well as in their redemption.
- The Issuer owns production facilities and structural subdivisions, which empower the Issuer to supply the construction on almost all stages.
Factors constraining the credit rating
- The Issuer suffers from inefficient homes delivery system.
- The issue size of UAH727.2m exceeds significantly Issuer`s equity of UAH1.4m as of Oct. 1, 2007.
- Issuer`s detrimental performance stemming from redistribution of cash flows within the holding, in fact the Issuer`s net loss in 2006 made up UAH372.8K with that for 9M2007 amounting to UAH2.8m
- 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
