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04.08.2008
Credit-Rating assigns Nove Misto LLC`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 UAH51.1m 2-year upcoming registered housing bonds (A-C series) to be issued by Lvov-based Nove Misto Construction Company LLC (`Issuer` or `Company`). The company`s principal activity is investing and construction. Today the company is carrying out 5 construction projects in the city of Lvov. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2007 and 1H2008 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Factors maintaining the credit rating:
- The general contractor Galytska Osnova LLC, which has construction experience, takes part in the construction of a multistory apartment building located at V. Chornovila Avenue P.Pancha Street which premises will be used to redeem the upcoming bonds issue;
- The Issuer owns 4 land plots in Lvov with total area of 0.9567 hectares;
- Prices and demand for the real estate in Lvov are higher than national average indicators.
Factors constraining the credit rating:
- Issuer has no experience both in carrying out the investment and construction projects and in bonds redemption by giving appropriate premises to their owners;
- Project for the construction of a multistory apartment building located at V. Chornovila Avenue P.Pancha Street is at the initial stage;
- The most of the company`s non-current assets, including a land plot where the construction of a multistory apartment building located at V. Chornovila Avenue P.Pancha Street is being conducted, are pledged;
- The issuer`s activities over 2006-2007 and 1H2008 were unprofitable; the Issuer`s equity has a negative value ((-)UAH4.8m as of June 30, 2008);
- 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 Sytems.
For further information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
