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31.01.2007
Upcoming bond issue by «Prioritet» LLC assigned uaBBB- (uaBBB minus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB- (uaBBB minus) long-term credit rating to the upcoming issue of registered housing bonds (of A and B series) by Crimea-based "Prioritet" LLC ("the Issuer" or "the company") for the amount of UAH 101m due on 31 March 2008. The main company`s activity is investment and construction. Today the company constructs a residential building in the borough of Gurzuf (Autonomous Republic of Crimea). In the course of analysis "Credit-Rating" used Issuer`s financial statements for 2003-2005 and 9M2006 as well as other inside information furnished by the company.
The uaBBB issue rating reflects adequate capacity of the obligor to timely and in full pay the given issue in the Ukrainian financial market environment, there is, though, a higher vulnerability to the effect of adverse changes in business, financial and economic conditions as compared to the debt liabilities with higher ratings. The "+" and "-" modifiers denote rating`s relative status within major categories.
Factors supporting the credit rating
- The Issuer is incorporated into the "HANNER" group, which is the leading construction company in Lithuania. The group has constructed 9 objects with the total floor area of over 200k sq.m. in Lithuania and 17 objects of 1.2m sq.m. total floor area to be constructed in Latvia, Lithuania, Romania and Ukraine by 2010.
- The Issuer constructs a residential building (with the current readiness of ca. 40%)
in
3, Stroiteley str. in the borough of Gurzuf (Crimea) where the real estate prices and demand 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, neither in bonds` redemption.
- Issuer`s dependency on "HANNER" group, whose risks are common with those of the Issuer.
- Issuer`s detrimental activity over the past 3 years and 9M2006, specifically the uncovered loss amounted to UAH 2.23m as of 30 Sep. 2006.
- Issuer`s authorized capital amounts to UAH 3m, with the planned issue size being UAH 101m.
- 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
