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02.12.2008
Credit-Rating downgrades Michaniki Ukraine`s bonds to uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBB from uaBBB- (uaBBB minus) the long-term credit rating assigned to registered housing bonds issued by Odessa-based Michaniki Ukraine Company with Foreign Capital (`issuer` or `company`). The amount of the issue is UAH50.5m due Jan.4, 2009. The outlook on the rating has been changed to stable. The company`s principal activity is investing and construction. Today the company implements 2 development projects in the cities of Kiev and of Odessa. To revise the rating Credit-Rating considered issuer`s financial statements for 3Q and 9M2008 and its other inside information.
An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions.
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
- The issuer is associated with Michaniki Group, which companies are leaders on a number of industries of Greece`s economy (i.e. construction and development, energy, wood processing, pipe production, and extractive industry).
- The issuer has necessary experience in construction of residential and commercial properties, in fact the company has commissioned Galereya Afina office and trade centre of 30K sq.m. total floor area, and a residential complex of 8.7K sq.m located in the city of Odessa.
- The construction readiness of Artemida residential complex, located at the crossing of Darnitsky Blvrd and Generala Zhmachenka Str. is 65% as of Sep. 30, 2008 (it advanced by 4 p.p. over 3Q2008).
Factors constraining the credit rating
- Delay in commissioning of Artemida residential complex (the planned due term is 4Q2008, with that altered being 2Q2009).
- The issuer does not have experience in redemption of housing bonds.
- Negative trends in Ukraine`s real estate sector.
- 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 analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
