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20.08.2008
Credit-Rating assigns Stroyresurs-Ekonomiya LLC`s upcoming bond issue uaB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaB to registered housing bonds (series B) to be issued by Kiev-based Stroyresurs-Ekonomiya LLC (`issuer` or `company`). The amount of the issue is UAH5.4m, with 2-year original maturity. The company`s principal activity is investing and construction. Today the company implements 3 investment and construction projects located in Kiev, Zhytomyr, and Zakarpattya Oblasts. In the course of analysis Credit-Rating consider issuer`s financial statements for 2003-2007 and 1H2008 as well as its other inside information.
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 issuer has experience in investing in construction, in fact during 2004-2007 the company as a customer implemented 2 investing and construction projects of 4.2K sq.m. total floor area with the construction readiness of the 2nd phase of the residential building located Tsentralna Str. in the borough of Petrivske, Kiev Oblast (which premises to redeem the bond issue of A series) making up 75% as at end-1H2008.
- The amount of funds invested in implementation of the project aimed at reconstruction of a former caserne #3 into a residential building located Metallistov Str., city of Ovruch, Zhytomyr Oblast, which premises to redeem the bond issue, is currently UAH1m or 10% of the project`s estimated value as at end-1H2008.
Factors constraining the credit rating
- The issuer does not have experience in redemption of housing bonds.
- The face value of 2 bond issues including the upcoming one (all UAH11.6m) exceeds the issuer`s equity of UAH2.3m as at end-1H2008.
- 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
