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30.12.2008
Credit-Rating downgrades Forum-Invest 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 A-F) issued by Kiev-based Forum-Invest LLC (`issuer` or `company`). The amount of the issue is UAH263.4m, with 5-year original maturity. The company`s principal activity is investing and construction. Today the company constructs a number of buildings located in the city of Kiev. 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 funding construction of residential buildings, in fact the issuer funded construction of a residential building of 17.1K sq.m. located in the city of Kiev, which was commissioned in August 2006.
Factors constraining the credit rating
- Significant delays in construction of residential buildings (of over 1 year), which premises to redeem the bond issue.
- The unfinished buildings located 19, Krasnova Str. and 31/17, Vasilkivska Str. are pledged as security for bank loans.
- High specific gravity of short term debt obligations in the overall structure of company`s debts.
- Issuer`s detrimental performance during the past few years.
- The issuer does not have experience in redemption of housing bonds.
- 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
