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06.03.2009
Credit-Rating downgrades Gradostroy 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 minus) the long-term credit rating assigned to registered housing bonds (series C-E and G-H) issued by Kiev-based Gradostroy LLC (`issuer` or `company`). The amount of the issue is UAH28.9m and UAH34.4m respectively to the series stated, with 5-year original maturity. The outlook on the rating is negative. The company`s principal activity is investing and construction. Today the company implements a number of developments located in the cities of Kiev, Chernihiv, and in the borough of Mikhaylivka-Rubezhivka (Kiev Oblast). To revise the rating Credit-Rating considered issuer`s financial statements for 4Q08 and full 2008 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.
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 constructing residential building, in fact the issuer has commissioned residential buildings of 42.4K sq.m. total floor area.
- The construction readiness of the residential buildings located 3в, Krasnogvardeyska Str., Chernihiv, and 13, Zdlobunivska Str., Kiev, which premises to redeem the bond issue of series C-E and G-H, is 70% and 54% respectively, as at end-2008.
Factors constraining the credit rating
- The issuer does not have experience in redemption of housing bonds.
- The issuer`s equity is negative of UAH(3.1)m as at end-2008, which has been prompted by company`s detrimental performance in 2005-2008.
- Delays in construction of above mentioned buildings of over 1 year duration.
- 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
Denis Rudenko
DRudenko@credit-rating.ua
