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27.04.2009
Credit-Rating downgrades LIKO-HOLDING LLC`s bonds to uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBB from uaBBB+ (uaBBB plus) the long-term credit rating assigned to registered housing bonds (series AD-AZ and T-AC) issued by Kiev-based LIKO-HOLDING LLC (`issuer` or `company`). The amount of the issue is UAH727.2m and UAH547.4m respectively to the series stated. The outlook on the rating is negative. The company`s principal activity is investing and construction. Today the company constructs residential buildings with underground parking garages and service facilities 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.
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 implementation of investment and construction projects, in fact over the past few years the issuer has commissioned 17 residential buildings of 180K sq.m. total floor area, located in the city of Kiev.
- The issuer operates production facilities and structural subdivisions, which enables the construction process to be supplied at almost all stages.
Factors constraining the credit rating
- Low construction readiness of buildings, which construction is to be financed with the funds raised from series T-AZ bonds, combined with low pace of construction works, which may result in untimely commissioning the buildings.
- Risks imposed by redistribution of cash flows within the group, neglecting issuer`s interests.
- 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
