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26.10.2006
The forthcoming bond issue of the LLC "Chernigov plant of construction materials" assigned uaB+ (uaB plus) credit rating
The independent Credit-Rating agency has today announced the assignment of the uaB+ (uaB plus) long-term credit rating to the forthcoming issues of the registered passive bonds by the LLC «Chernigov plant of construction materials», namely (B series) for UAH 20.7 mln. with maturity to 30 March 2007, and (C-E series) for UAH 87.7 mln. with maturity of C series to 30 Apr. 2009, of D and E series to 31 Jan. 2010. The main company’s activities are production of construction materials (white and colour sand-lime bricks, porous aerated concrete) and investment and construction activity. Today the company implements 5 investment and construction projects in the cities of Kiev and of Simferopol. During the analysis the Credit Rating agency used the Issuer’s 2Q and 1H 2006 financial reports, as well as other inside information furnished by the company.
The uaB debt liability rating reflects a higher default possibility than of the uaBB rating, though in this case the obligor’s capacity is adequate to pay its commitments in the Ukrainian financial market environment. The present debt liability is more affected by the adverse changes in business, financial and economic conditions than debt liabilities with higher ratings. That may negatively affect the obligor’s capacity and willingness to fully and timely pay interest and principal on obligations. «Plus» denotes the rating’s relative status within major categories.
Factors supporting the credit rating
- The Issuer is involved in activity connected with organizing and funding the residential construction in the cities of Kiev and of Simferopol, where the real estate prices have been growing over the past 5 years.
- The Issuer’s experience as general contractor and as contractor in conduction of construction works. The Issuer as a customer and investor takes part in implementation of 2 projects aimed at construction of Kiev-based residential buildings with the total floor area of 35.6 thousand sq.m. (with over 80% readiness). The buildings to be set in operation to 2006 year-end.
- The Issuer is also involved in production of construction materials, which contributes to the construction cost reduction and to the diversification of revenue sources.
Factors constraining the credit rating
- The Issuer does not have experience in implementation of construction projects and in bonds’ retirement by providing premises to their owners.
- The funds obtained from the C-E series bonds’ placement will be aimed at implementation of 2 residential buildings construction projects in the city of Simferopol.
- The implementation of the projects mentioned above is currently on the initial stage.
- Volatility in legislation and taxation on operations connected with the construction activity and with 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
