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25.01.2007
Upcoming bond issue by «Cultural-business centre» LLC assigned uaCCC credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaCCC credit rating to the upcoming issue of registered zero-coupon (housing) bonds (of B series) by Dnipropetrovsk-based "Cultural-business centre" LLC ("the Issuer" or "the company") for the amount of UAH 14m with the 2 1/2 - year original maturity, the Outlook for the rating is Positive. The main company`s activity is investment and construction. Today the company constructs a residential building in the borough of Koreiz (Autonomous Republic of Crimea). In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 2003-2005 and 9 months 2006 as well as other inside information furnished by the company.
The uaCCC issue rating reflects the fact that default possibility may be faced in the Ukrainian financial market environment. The timely and full payments on debt liabilities are substantially dependent upon favourable business, financial and economic conditions.
Positive Outlook shows a possibility for the rating`s upgrade in the course of the year on condition that the positive tendencies are retained and the current risks are reduced.
Factors supporting the credit rating
- The bonds issued shall be redeemed by granting the proprietary rights on residential premises in 64-66 Yuzhnaya str, borough of Koreiz with the 23.5% current construction readiness as of 15 Jan. 2007.
- The Issuer is involved in financing the residential construction on the southern coast of Crimea where the real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The Issuer does not have experience in investment and construction projects, neither in bonds` redemption.
- Increase in total obligations on 2 zero-coupon (housing) bond issues to UAH 30.5m which 5x exceeds the Issuer`s own capital as of 30 Sep. 2006.
- 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
