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13.10.2008
Credit-Rating assigns Kyiv Testing Repair and Mechanical Works OJSC`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 plus) to registered housing bonds (series A-E) to be issued by Kiev-based Kyiv Testing Repair and Mechanical Works OJSC (`issuer` or `company`). The amount of the issue is UAH14.6m due Jan. 29, 2010. The company`s principal activity is investing and construction and leasing of owned immovable property. Today the company constructs an administrative and office centre located in the city of Kyiv. In the course of analysis Credit-Rating considered issuer`s financial statements for 2005-2007 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 by the issuer and UkoinvestStroy LLC in the construction of the office and administrative building located 40, Ushinskogo str. Kiev, which premises to redeem the bond issue, is UAH33.2m as of Sep. 1, 2008 or 41% of the project`s estimated value.
- The project involves Litoy Kamen LLC as a general contractor, which has experience in construction activities.
Factors constraining the credit rating
- The issuer does not have experience in investing and construction, neither in redemption of housing bonds.
- The amount of the bond issue of UAH14.6m exceeds the issuer`s equity of UAH5.2m 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 systems.
For more information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
