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26.12.2008
Credit-Rating downgrades Gradostroy LLC`s bonds to uaCCC
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaCCC from uaB the long-term credit rating assigned to registered housing bonds (series I-P) issued by Kiev-based Gradostroy LLC (`issuer` or `company`). The amount of the issue is UAH23.5m due Dec. 22, 2008. The company`s principal activity is investing and construction. Today the company implements a number of construction projects located in the cities of Kiev, Chernihiv, and in the borough of Mikhailovka-Rubezhovka (Kiev Oblast). 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 uaCCC credit rating is characterized with the VERY LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. There is a default possibility.
Factors maintaining the credit rating
- The issuer has experience in residential construction; in fact the issuer has commissioned residential buildings of 42.4K sq.m. floor area.
- Adequate volume of works conducted at construction of the residential building located 9б, Kirova Str., borough of Mikhailovka-Rubezhovka (Kiev Oblast), which premises are to redeem the bonds of series I-P.
Factors constraining the credit rating
- The issuer does not have experience in redemption of housing bonds.
- Issuer`s negative equity of UAH7.3m as of Sep. 30, 2008, which was prompted by issuer`s detrimental performance in 2005-2007 and 9M2008.
- The construction works at the residential building located 9б, Kirova Str., borough of Mikhailovka-Rubezhovka, which premises to redeem the bonds of series I-P, are suspended.
- 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
