Press releases

print 16.09.2005

"uaCC-" credit rating assigned to upcoming bond issue of PF "Evgenia"

Independent rating agency Credit-Rating announced the award of a long term “uaCC-” credit rating to the issuance of registered passive (purpose) bonds of production company Eugenia in the amount of 78.8 million UAH for a three year period of circulation. The company’s main business is construction and reconstruction of commercial property, timber-works (sawmills) and carpentry business and other kinds of whole sale business.

Positive factors that were taken into account in the rating:

Increase in demand for apartments and commercial property in newly built houses in Kyiv and Kyiv region;
tendency for price rise of such property which is the subject of the issuer’s purpose bonds issuance.

Negative factors that were taken into account in the rating:

The issuer has neither capital funds nor authorized capital as of July 1, 2005, the owned capital is presented by undistributed profit in the amount of 40 thousand UAH or 3.5% of Eugenia Production Company’s liabilities; the company’s owned capital had negative value during 2003-2004 as the result of sustained losses (204,1 thousand UAH and 111,6 thousand UAH correspondingly);
Issuance volume exceeds 68.4 times the currency balance (the currency balance of the company is 1,151.9 thousand UAH) for the first half year of 2005;
As of August 29, 2005 the issuer’s documentation for the construction has not been approved (the issuer does not have all the necessary permits and approvals) , which makes it more complicated to determine the terms of the beginning and completion of the construction and, therefore, it complicates the fulfillment of the obligations on terms of bonds’ issuance;
Lack of experience in sale of housing and raising of public funds for construction;
Creditor debt makes up 96.5% of the currency balance and equals 1,111.9 thousand UAH as of July 1, 2005;
Unsettlement and tangibility of legislative regulation, taxation systems and operations connected with construction industry, as well as fundraising.