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07.12.2006
The forthcoming bond issue by «Gradostroy» LLC assigned uaBB- (uaBB minus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB- (uaBB minus) long-term credit rating to the forthcoming issue of the registered zero-coupon (housing) bonds (of G and H series) by Kiev-based "Gradostroy" LLC ("the Issuer" or "the company") for the amount of UAH 34.4m with the 5-year original maturity. The investment and construction is the main company`s activity. Today the Issuer constructs residential houses in the cities of Kiev, Chernigov, Alushta. In the course of analysis the "Credit-Rating" agency used Issuer`s financial reports for 2002-2005 and for 9 months of 2006 as well as other inside information furnished by the company.
Issues rated uaBB are the LEAST AFFECTED BY THE RISK OF NONPAYMENT of the principal and interest within the 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 nonpayment is low in the near future . "+" or "-" modifiers denote rating`s relative status within major categories.
Factors supporting the credit rating
- The Issuer has experience in financing investment and construction projects via the bonds` placement and their exchange for premises (the apartments of 801 sq.m. total area for UAH 2.6m were ceded to their owners in accordance with the exchange agreements)
- The Issuer as a customer set in operation a 12,860.0 sq.m. residential house, and another one of 29,037.0 sq.m. is built and being set in operation.
- The construction to be financed by the funds obtained form the bonds` placement is based in the city of Kiev, where the real estate prices have been growing over the past 5 years.
Factors constraining the credit rating
- Risks incurred by the project`s size: the Issuer is planning to construct by 2008 five residential complexes of 140.5 thousand sq.m. total floor area with 49.3 thousand sq.m. of them being the object to be financed partially by the planned bond issue.
- The total Issuer`s obligations exceeded by 6.7% the asset balance, with the equity capital being UAH (-)10.17m
- 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
