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27.02.2007
Bond issue by «Otdykh-service» LLC assigned uaB+ (uaB plus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB+ (uaB plus) long-term credit rating to the issue of registered housing bonds (A series) by Feodosiya-based "Otdykh-service" LLC ("the company" or "the Issuer") for the amount of UAH 25m due on 25 Aug. 2009. The Outlook for the rating is Positive. The main company`s activity is investment and construction. Today the company as a customer and general contractor constructs a residential building in the city of Feodociya. In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 2003-2005 and 9M2006, as well as other 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.
Positive Outlook exhibits 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 Issuer as a customer has experience in construction of 2 residential buildings of 6.9K sq.m. total floor area.
- The Issuer is involved in 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 bonds` redemption.
- The bond issue is to be redeemed by residential and non-residential premises in the building which construction is on the stage of project`s arrangement.
- The bond issue size 1.6x 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
