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08.11.2006
The forthcoming bond issue by the Private Enterprise "Sozidatel-1" assigned uaB credit rating
The independent "Credit-Rating" agency has today announced the assignment of the uaB long-term credit rating to the forthcoming issue of the registered zero-coupon (housing) bonds (A-K series) by the Kirovograd-based Private Enterprise "Sozidatel-1" ("Sozidatel-1" or "the company", or "the Issuer") for the amount of UAH 7.9MM with the 1-year original maturity. The investment and construction is the main company`s activity. Today "Sozidatel-1" constructs a single-sectional apartment house in the city of Kirovograd. During the analysis "Credit-Rating" used Issuer`s 2004-2005 and 1H 2006 financial reports, as well as other inside information furnished by the company.
The uaB debt liability rating denotes a HIGHER DEFAULT POSSIBILITY than of the uaBB rating, though in this case the obligor`s capacity is adequate to pay its obligations in the Ukrainian financial market environment. This 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.
Factors supporting the credit rating
- The Issuer is a customer and investor of the residential house, The company`s general contractor is OJSC "SMU #5" (Construction and Montage Office #5), which has a great experience in implementation of such projects.
- The Issuer is incorporated into the group of construction companies. The group owns production facilities and structural divisions for supplying the construction on almost all stages.
Factors constraining the credit rating
- The Issuer does not have experience in implementation of investment and construction projects and in bonds` redemption.
- The total company`s dependency on the group of companies, which risks are common with those of the Issuer.
- The residential house construction to be financed by the funds obtained from the bonds` placement is currently on the initial stage.
- A court procedure on the bankruptcy case #14/26 was initiated on 21 Feb. 2003 against OJSC "SMU #5" which was withdrawn by the Resolution of the Economic Court of Kirovograd Oblast dated 26 March 2003 via the amicable agreement dated 12 June 2003 between OJSC "SMU#5" and its creditors.
- Volatility in legislation and taxation on operations connected with construction and attraction of funding.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale can be found as 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
