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26.12.2006
Upcoming bond issue by “Konstanta” LLC assigned uaBB+ (uaBB plus) credit rating
“Credit-Rating”, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB+ (uaBB plus) long-term credit rating to the upcoming issue of registered zero-coupon (housing) bonds (of B series) by Zaporozhye-based “Konstanta” LLC (“the Issuer” or “the company”) for the amount of UAH 136.2m due on 1 Nov. 2009. Investment and construction is the main company’s activity. Today “Konstanta” implements 5 investment and construction projects in the city of Zaporozhye. In the course of analysis the “Credit-Rating” agency used Issuers financial reports for 2003-2005 and 9 months of 2006, as well as other inside information furnished by the company.
Debt liabilities rated uaBB are the least affected by the risk of non-paymnet 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. The “+” and “-“ modifiers denote rating’s relative status within major categories.
Factors supporting the credit rating
- “Konstanta” LLC 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
of 57.3 thousand sq.m. total floor area)
- The Issuer owns production facilities for supplying the construction on almost all
stages.
- The Issuer is involved in residential and commercial construction in the city of
Zaporozhye, where the real estate prices have been growing over the past
years.
Factors constraining the credit rating
- Risks incurred under the company’s activity size, specifically the Issuer finances
via the bonds’ placement two residential complexes constructions with the total floor
area of 108.2 thousand sq. m. which almost 2x exceeds the total area of all buildings
built by the Issuer.
- The company does not have experience in bonds’ redemption.
- Issuer's negative own capital over the past 5 years ( UAH (-)560.4 thousand as of 30
Sep. 2006)
- 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 may also 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
