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28.03.2007
Bond issue by «Direction of Office Buildings» assigned uaB+ 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 (D series) by Donetsk-based "Direction of Office Buildings" LLC ("the Issuer" or "the company") for the amount of UAH 8.8m with the 5-year original maturity. The main company`s activity is investment and construction. In the course of analysis the agency used Issuer`s financial statements for 2002-2005 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 company as a customer set in operation two office buildings of 7.2K sq.m. total floor area in the city of Donetsk.
- Funds raised from the bonds` placement are to be aimed at construction of residential building in the city of Donetsk with the comparatively modest floor area of 1,780.08 sq.m.
- The Issuer is involved in construction funding in the city of Donetsk, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- Issuer`s liabilities 11.8% exceeds its asset balance 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
