print
15.01.2010
Credit-Rating downgrades Financial and Construction Centre Sozidatel 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 the long-term credit rating assigned to registered housing bonds (series A-G) issued by the Dnepropetrovsk-based Financial and Construction Centre Sozidatel LLC (‘issuer’ or ‘company’) for the amount of UAH144.9m. The rating’s outlook is stable. The company’s principal activity is investing and construction. Today the company participates in investment and construction projects located in the city of Dnepropetrovsk. To revise the rating Credit-Rating considered issuer’s financial statements for 3Q2009 and 9M2009 and other inside information.
The company has issued bonds of series A-G for funding construction of a number of residential buildings located in the cities of Dnepropetrovsk and Krivyi Rih.
The downgrade of the rating assigned to bonds of series A-G was prompted by low pace of construction works at the 2nd phase of the residential building located in Dnepropetrovsk (Kosmicheskaya and Mandrikovskaya Str.), which imposes risks of late building’s commissioning and consequently late redemption of series G bonds. At that the issuer has commissioned some buildings and redeemed housing bonds of series A-F.
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.
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
-
Scientific and Manufacturing Association Sozidatel CJSC, the general contractor, has experience in carrying out the construction projects, in fact starting from 1994 the company has built or renovated around 40 buildings of over 250K sq.m. floor area.
-
readiness of the project for construction of a residential building (II stage) in the city of Dnepropetrovsk near Kosmichnaya Str. and Mandrikovskaya Str. (construction readiness was 78% as of September 30, 2009).
Factors constraining the credit rating
-
low pace of construction of a residential building (II stage) in the city of Dnepropetrovsk near Kosmichnaya Str. and Mandrikovskaya Str., which will entail anticipated late redemption of series G.
-
high level of dependency on Scientific and Manufacturing Association Sozidatel CJSC.
-
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
