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08.07.2010
Credit-Rating Assigns Budspetsservice LLC’s Bonds uaB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaB+ (uaB plus) to registered housing bonds (series A, B, C, H, I, J, T, U) issued by Kiev-based Budspetsservice LLC (‘issuer’ or ‘company’) for the amount of UAH540m. The outlook on the rating is stable. The company’s principal activity is investing and construction. Today the company constructs a second phase of the residential area with social facilities and underground parking, located in the city of Kiev. In the course of analysis Credit-Rating considered issuer’s financial statements for 2005-2009 and 1Q2010 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).
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
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The issuer has experience in residential construction: in fact over the past 2 years the issuer has commissioned residential premises of 80K sq.m.
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The issuer has experience in redemption of housing bonds.
Factors constraining the credit rating
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The project on construction of a residential area with social facilities and underground parking, located Podvisotskogo Str. Pechersk District of Kiev: the issuer is planning to issue housing bonds of series A, B, C, H, I, J, T, U for funding construction of certain buildings.
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Risks associated with scale of operating activities (in the upcoming 7 years the issuer is planning to commission the 2nd phase of the residential area located Podvisotskogo Str. Pechersk District of Kiev of 455.6K sq.m.).
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Issuer’s negative performance indicators recorded in 2005-2009 and 1Q2010, coupled with considerable debt burden.
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Ongoing negative trends in Ukraine’s real estate sector.
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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
