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07.11.2006
The forthcoming bond issue by the LLC "Nikos" assigned uaBB credit rating
The independent "Credit-Rating" agency has today announced the assignment of the uaBB long-term credit rating to the forthcoming issue of the registered zero-coupon (housing) bonds (A, B, C, D series) by the Cherkasy-based LLC "Nikos" ("Nikos") for the amount of UAH 9.6MM due 22 Oct. 2007. The investment and construction is the main company's activity. Today "Nikos" finances the construction of the office-trade centre and of 2 residential houses in the city of Cherkasy. During the analysis the "Credit-Rating" agency used Issuer's 2002-2005 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 NONPAYMENT of the principal or interest within speculative grade. The obligor, however, may be impaired to timely and in full 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.
Factors supporting the credit rating
- The Issuer is the leading company of the "Krug" group (which owns corporate rights of 31 entities). The main group's activity is construction and production of construction materials. The group owns production facilities and structural divisions for supplying the construction on almost all stages.
- The funds obtained from the bonds' placement are to be aimed at construction of a residential house (with current readiness over 86%) in the city of Cherkasy.
- The UAH 30.77MM own capital over 3x exceeds the planned bond issue size.
- The profitable Issuer's activity over the past 3 years and 1H 2006, the size of the retained earnings is UAH 0.57MM (as of 30 Jun. 2006)
Factors constraining the credit rating
- The Issuer does not have experience in residential construction, and in bonds' redemption.
- Volatility in legislation and taxation on operations connected with construction and with attraction of funding.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may 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
