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22.02.2007
Upcoming bond issue by «Gelada» PE assigned uaB- (uaB minus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB- (uaB minus) long-term credit rating to the issue of registered housing bonds (A series) by Alushta-based "Gelada" Private Enterprise ("the company" or "the Issuer") for the amount of UAH 29.9m due on 30 Sep. 2008. The main company`s activity is investment and construction. Today the company constructs a hotel in the borough of Alushta. In the course of analysis the agency used Issuer`s financial statements for 2004-2005 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. The "+" and "-" modifiers denote rating`s relative status within major categories.
Factors maintaining the credit rating
- The bond issue is to be redeemed by premises in the hotel with the construction readiness of 35%.
- The Issuer constructs a residential and recreational complex on the southern coast of Crimea, where 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.
- Issuer`s negative equity of UAH (-)437.7K as of 30 Sep. 2006.
- The planned issue size almost 9x exceeds Issuer`s assets 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
