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20.02.2007
Bond issue by «Dodon» LLC 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 to the issue of registered housing bonds (A, B series) by Lviv-based "Dodon" LLC ("the Issuer" or "the company") for the amount of UAH 42.8m with the 3 1/2-year original maturity. The main company`s activity is investment and construction. Today the company finances a construction of 2 residential buildings in the cities of Lviv and Chernivtsi. In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 2003-2005 and 9M2006 as well as other inside information furnished by the company.
The uaB issue rating reflects 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 maintaining the credit rating
- The funds raised from the bonds` placement are to be aimed at construction of 2 residential buildings in Lviv and Chernivtsi with the current readiness of 35% and 10% respectively as of 25 Dec. 2006.
- The general contractor of construction is "Znayubudinvest" PE which has relation to the Issuer and has constructed 2.1K sq.m. of residential premises.
- Growth rates of construction market in Lviv and Chernivtsi are in line with the all-Ukrainian tendency of growth in investment and construction business.
Factors constraining the credit rating
- The Issuer does not have experience in investment and construction projects, neither in bonds`issuances and redemption.
- The Issuer has not been involved in financial and economic activity over the past 4 years.
- The planned issue size 109.8x exceeds the Issuer`s asset balance.
- 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
