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17.04.2009
Credit-Rating downgrades PKF Budivel 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 A-C) issued by Dnepropetrovsk-based PKF Budivel LLC (issuer or company). The amount of the issue is UAH41.3m due Nov. 12, 2010. The outlook on the rating is negative. The companys principal activity is investing and construction, as well as wholesale and retail trade with building materials. Today the company constructs a trade and residential complex located in the city of Dnepropetrovsk. To revise the rating Credit-Rating considered issuers 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on the condition that negative tendencies are maintained and that current risks are realized.
Factors maintaining the credit rating
- The issuer has necessary experience in investing and constructing, in fact the issuer has commissioned a residential building of 9.1K sq.m. total floor area.
- The overall amount of funds invested in construction of Yuzhnyi trade and residential complex located 3, Stanislavskogo Str., Dnepropetrovsk, which premises to redeem the bonds of series A-C was UAH10.8m as of end-2008.
Factors constraining the credit rating
- The works on the project (Yuzhnyi trade and residential complex located 3, Stanislavskogo Str.), which is to be funded with funds raised from A-C series bond, have been suspended.
- The proprietary rights for unfinished project located 3, Stanislavskogo Str., are pledged as security for a bank loan.
- The issuer does not have experience in redemption of housing bonds.
- The companys liquidity has eroded under adverse environment in the financial market combined with opacity regarding refinancing the issuers obligations on bank loans.
- Ongoing negative trends in Ukraines 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
