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08.10.2010
Credit-Rating Downgrades Investment and Construction Group LLC’s Bonds to uaCCC
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaCCC from uaB- (uaB minus) the long-term credit rating assigned to registered housing bonds (series A and B-C) issued by Kiev-based Investment and Construction Group LLC (‘issuer’ or ‘company’). The amount of the issue is UAH9.9m and UAH16m respectively to the series stated. The outlook on the rating is stable. The company’s principal activity is investment and construction. Today the company constructs a residential building with social facilities and a parking located in the city of Kiev. To revise the rating Credit-Rating considered issuer’s financial statements for 2009 (from public sources).
An obligor or a debt liability with uaCCC credit rating is characterized with the VERY LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. There is a default possibility.
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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Financial backing from non-resident.
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The amount of funds invested in construction of a residential building with social facilities and a parking located 17-23 Gonchara Str., Kiev (the volume of incomplete construction was reported at UAH83.7m as at Dec. 31, 2009, with the growth in 4Q2009 at UAH11.5m), which premises to redeem the bonds.
Factors constraining the credit rating
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The construction works on the project have been suspended.
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Issuer’s information opacity.
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The proprietary rights for the residential building are pledged as security for a bank loan.
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The issuer does not have experience in implementation of investment and construction works, neither in redemption of housing bonds.
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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
