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29.09.2008
Credit-Rating assigns DobroBud LLC`s 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- (uaB minus) to registered housing bonds (series A-C) issued by Dnepropetrovsk-based DobroBud LLC (`issuer` or `company`). The amount of the issue is UAH171.7m, with 3-year original maturity. The company`s principal activity is investing and construction. Today the issuer constructs a residential building with installed offices and parking garage located in the city of Dnepropetrovsk. In the course of analysis Credit-Rating considered issuer`s financial statements for 2004-2007 and 1H2008 and 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Factors maintaining the credit rating
- The volume of funds invested in construction of the residential building with installed offices and parking garage located Lamanoy lane, #13 in the city of Dnepropetrovsk, which premises to redeem the bond issue, is UAH43.5m as of Aug. 22, 2008 or 25% of the project`s estimated value.
Factors constraining the credit rating
- The issuer does not have experience in implementation of investment and construction projects, neither in redemption of housing bonds.
- The size of the bond issue of UAH171.7m exceeds the issuer`s assets of UAH44.9m as of Jun. 30, 2008.
- Issuer`s detrimental performance in 2004-2007 and 1H2008 coupled with issuer`s negative equity of UAH1.4m as of Jun. 30, 2008.
- Issuer`s significant debt burden: the amount of liabilities on a bank loan amounts to UAH43.9, which is 97.8% of liabilities as of Jun. 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 systems.
For more information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
