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07.04.2009
Credit-Rating downgrades INTEGRA-HOLDING LLC`s bonds to uaBB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBB+ (uaBB plus) from uaBBB the long-term credit rating assigned to registered housing bonds (series A-L) issued by Kiev-based INTEGRA-HOLDING LLC (`issuer` or `company`). The amount of the issue is UAH312.8m due Apr. 29, 2011. The company`s principal activity is investing and construction. Today the company constructs a multi-storied office and residential complex with underground parking garage located in the city of Kiev. 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 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Factors maintaining the credit rating
- The issuer is associated with KDD-Grupp, which companies operate in development sector: in fact, over 1997-2006 several projects have been implemented, specifically 4 residential, commercial, and office buildings of 157K sq.m. total floor area.
- The project located 2, Strutinskogo Str., Kiev involves Osnova-Solsif JV as a general contractor, which enjoys significant experience in construction and operates production facilities, which enables the construction process to be supplied at almost all stages.
- Increase in the volume of funds invested in the project to UAH49.4m (UAH31.2m as of Oct. 1, 2008), the premises in which to redeem the bond of series A-L.
Factors constraining the credit rating
- The residential complex, which premises to redeem the bonds of series A-L is pledged as security for a bank loan.
- Risks imposed by redistribution of funds within KDD-Grupp neglecting issuer`s interests, which makes it vulnerable to risks of the entire group.
- Risks imposed by size of KDD-Grupp`s projects, in fact the group plans to build a number of residential and commercial buildings by 2012.
- The issuer does not have experience in redemption of housing bonds.
- Issuer`s negative equity of UAH(22.5m) as of Dec. 31, 2008, which was prompted by issuer`s detrimental performance in the past few years.
- 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
