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06.11.2006
The forthcoming bond issue by the LLC "Konstanta" assigned uaBB+ (uaBB plus) credit rating
The independent "Credit-Rating" agency has today announced the assignment of the uaBB+ (uaBB plus) long-term credit rating to the forthcoming issue of the registered zero-coupon (housing) bonds (A series) by the Zaporozhye-based LLC "Konstanta" for the amount of UAH 106.3MM due 1 Jul. 2009. The investment and construction is the main company`s activity. Today the LLC "Konstanta" implements 5 investment and construction projects in the city of Zaporozhye. During the analysis "Credit-Rating" used Issuer`s 2003-2005 and 1H 2006 financial reports, as well as other inside information furnished by the company.
The debt liabilities rated uaBB are the LEAST AFFECTED BY THE RISK OF NON-PAYMENT of the principal or interest within speculative grade. The obligor, however, may be impaired to full and timely meet its commitments on the obligation in the Ukrainian financial market environment in the event of adverse changes in business, financial and economic conditions. However, the possibility of non-payment is low in the near future. "Plus" denotes rating`s relative status within major categories.
Factors supporting the credit rating
- The LLC "Konstanta" is the leading company on the residential construction market in the city of Zaporozhye and has experience in implementation of investment and construction projects as a general contractor and investor (the Issuer has built 12 residential houses with the overall floor area of 57.3 thousand sq.m.).
- The Issuer owns production facilities for supplying the construction on almost all stages.
- The Issuer conducts activity, connected with residential and commercial construction in the city of Zaporozhye, where the real estate prices have been growing over the past few years.
Factors constraining the credit rating
- Risks incurred from the project`s size, the total floor area of the house to be financed by the funds obtained from the bonds` placement is 51.9 thousand sq.m. (which is equal to the area of all houses built by the Issuer).
- The LLC "Konstanta" does not have experience in bonds` issuance and redemption by providing premises to their owners.
- The construction of the house to be financed by the funds obtained from the bonds` placement is currently on the initial stage.
- The negative own capital over the past 5 years (as of 30 Jun. 2006 it was (-) UAH 1.5MM).
- Volatility in legislation and taxation on operations connected with construction and attraction of funding.
Information on all the credit raings 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
