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10.12.2008
Credit-Rating downgrades Konstanta LLC`s bonds to uaB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaB from uaBB+ (uaBB plus) the long-term credit rating assigned to registered housing bonds (series A and series B) issued by Zaporizhzhia-based Konstanta LLC (`issuer` or `company`). The amount of the issue is UAH106.3m and UAH136.2m respectively to the series mentioned; the bonds` original maturity is up to 3 ½ year. The rating outlooks for series A bonds is stable and that for series B bonds is negative. The company`s principal activity is investing and construction. Today the company implements 4 investment and construction projects located in the city of Zaporizhzhia. 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 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.
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.
Factors maintaining the credit rating
- The issuer has experience in investing and construction, specifically the issuer has implemented 12 investment and construction projects for 57.3K sq.m. over its 14-year period of operation.
- The construction readiness of the residential complex located Borodinska Str. Zvezdny Lane, city of Zaporizhzha, which premises to redeem the series A bonds was 35% as of Sep. 30, 2008, with the readiness of the residential complex located 3Б, Gryaznova, which premises to redeem the series B bonds was 18% as of Sep. 30, 2008.
Factors constraining the credit rating
- The issuer does not have experience in redemption of housing bonds.
- Delay in commissioning the residential complex located Borodinska Str. Zvezdny Lane, city of Zaporizhzha, which premises to redeem the series A bonds, is over 6 months as of Sep. 30, 2008, with the delay in commissioning he residential complex located 3Б, Gryaznova, which premises to redeem the series B bonds, is over 6 months as of sep. 30, 2008.
- Ongoing 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
