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19.03.2007
Upcoming bond issue by «Stroyinvest SM» 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 upcoming issue of registered housing bonds (A series) by Poltava-based "Stroyinvest SM" CJSC ("the Issuer" or "the company") for the amount of UAH 17m with the 2 1/2-year original maturity. The main company`s activity is investment and construction. Today the company constructs a residential building in the city of Sumy. In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 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 Issuer has experience of an investor in construction of a 9K sq.m. residential building.
- The Issuer is involved in residential construction in the city of Sumy, 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 of a customer in construction, neither in bonds` redemption.
- The bond issue is to be redeemed by residential and non-residential premises in 1/2, Novomestenskaya str, Sumy, with the ongoing preparatory stage of construction.
- The planned issue size (UAH 17m) 3.5x exceeds Issuer`s asset balance (UAH 5.1m) 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
