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24.10.2006
The forthcoming bond issue of the CJSC «Centrobudinvest» assigned uaB- (uaB minus) credit rating
The independent «Credit-Rating» agency has today announced the assignment of the uaB- (uaB minus) long term credit rating to the forthcoming issue of the registered passive bonds (A-C series) by the Kiev-based CJSC «Centrobudinvest» for the amount of UAH 253 mln. due on April 30, 2008. The investment and construction is the main company’s activity. Today, the CJSC «Centrobudinvest» conducts financing of the «Cosmopolitan» residential complex in the Shevchenkivskiy District of the city of Kiev. During the analysis the «Credit-Rating» agency used full Issuer’s 2003-2005 and 1H 2006 financial reports, as well as other inside information, furnished by the company.
The uaB credit rating of an issue denotes a HIGHER DEFAULT POSSIBILITY than of the uaBB rating, though in this case the obligor’s capacity is adequate to pay it in the Ukrainian financial market environment. This issue is more affected by adverse changes in business, financial and economic conditions than issues with higher ratings. That may negatively affect the obligor’s capacity and willingness to fully and timely pay interest and principal on commitments. The «minus» denotes rating’s relative status within major categories.
Factors supporting the credit rating level
- The Issuer implements the investment and construction project, which was funded by 32% (as of Oct. 17 2006) from the total investment size.
- The Issuer conducts the activity connected with construction of residential and commercial premises in the city of Kiev, the prices for which have been growing over the past years.
Factors restricting the credit rating level
- The Issuer does not have experience in implementation of investment and construction projects and in bonds’ retirement by providing premises to their owners.
- Risks incurred by the large scale of the project, in fact, the total area of the complex, which construction is to be funded by the bonds’ placement, will account for 63.9 thousand sq.m.
- The negative index of the equity capital (-) UAH 4.3 mln. as of June 30, 2006.
- The right of property for the object constructed is pawned by the bank credit.
- Volatility and disorder in the system of legislative control and taxation on operations connected with the construction activity, and, in particular, with the attracting of funding.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale can be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
