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19.12.2006
Bond issue by «Dom tvorchestva «Akter» CJSC assigned uaB credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB long term credit rating assigned to registered zero-coupon (housing) bonds (of A, B, C series) by Yalta-based "Dom tvorchestva "Akter" CJSC ("the Issuer" or "the company") for the amount of UAH 37m with the 1 Ѕ - year original maturity. Investment and construction is the main company`s activity. Today the company as a customer constructs a recreational and hotel complex in the city of Yalta. In the course of analysis the "Credit-Rating" agency used Issuer`s 2001-2005 and 1H 2006 financial reports as well as other inside information furnished by the company.
The uaB issue rating exhibits 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 implements the investments and construction project funded by 15% (as of 1 Oct. 2006), necessary preparatory works conducted on the site.
- The Issuer also provides hotel services in owned hotels.
- The Issuer is involved in funding of recreational premises construction in the city of Yalta, where the real estate prices have been growing over the past few years.
Factors constraining the credit rating
- The company does not have experience in implementation of investment and construction projects, and in bonds` redemption.
- The property rights for the object being constructed are pawned by the bank credit.
- The construction to be financed by the funds obtained from the bonds` placement is currently on the initial stage.
- 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
