print
13.10.2009
Credit-Rating downgrades NPO Sozidatel CJSC’s bonds to uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBB from uaBBB+ the long-term credit rating assigned to registered housing bonds (series A, B) issued by Dnepropetrovsk-based Scientific and Manufacturing Association Sozidatel CJSC (‘issuer’ or ‘company’) for the amount of UAH80.2m due March 22, 2010. The outlook on the rating has been changed to stable from negative. The company’s principal activity is rendering of services of industrial and residential construction, engineering and development, and utilities. Toda the company implements a number of investment and construction projects located in the city of Dnepropetrovsk. To revise the rating Credit-Rating considered issuer’s financial statements for 2Q2009 and 1H2009 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.
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
-
Issuer’s leading market positions in Dnepropetrovsk, in fact starting from 1994 the company has built or renovated around 40 buildings of over 250K sq.m. floor area.
-
The issuer owns production facilities and structural subdivisions, which empower it to supply the construction process on almost all stages.
-
High construction readiness of company’s projects, in fact that of the 3rd phase of construction of a residential building located D.Kedrina Str. (78% as at June 30, 2009) and of residential complex located in Topolina Str. (65% as at June 30, 2009).
Factors constraining the credit rating
-
The company has encountered difficulties with funding the outstanding obligations, which may imperil funding of construction projects.
-
Low pace of works at the 3rd phase of construction of a residential building located D.Kedrina Str. and at residential complex located in Topolina Str, which will entail anticipated late redemption of series A and B 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 +38044490 25 50
SRozumyak@credit-rating.com.ua
Denis
Rudenko
DRudenko@credit-rating.ua
