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30.03.2007
Upcoming certificate issue by «Zhitlobud-Invest» assigned uaCCC credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaCCC long-term credit rating to the issue of registered FREO (Funds for Real Estate Operations) certificates (A-D series) by Kiev-based "Zhitlobud-Invest" LLC ("the Issuer" or "the company") for the amount of UAH 1.7bn due on 1 Apr. 2014. The main company`s activity is attraction of funds for construction financing. Today the Issuer establishes a fund for real estate operations to finance a construction of multifunctional "Eney" complex in the city of Kiev. In the course of analysis the agency used Issuer`s financial statements for 2005-2006, as well as other inside information furnished by the company.
The uaCCC issue rating reflects a default possibility, which may be faced in the Ukrainian financial market environment. The timely and full payments on debt liabilities are substantially dependant upon favourable business, financial and economic conditions.
Factors maintaining the credit rating
- Funds raised from the certificate issue are to be aimed at financing the construction of multifunctional "Eney" complex, which is situated in Kiev city centre, and, therefore is attractive for investments.
Factors constraining the credit rating
- The Issuer does not have experience in real estate operations as a FREO manager.
- The planned for 2014 redemption of certificate issue is contingent upon real estate market environment and capability of the Customer ("Rele-Invest" LLC) and of the General Contractor ("Rele" LLC) to construct the "Eney" complex on time, which project size may incur risks (total complex`s floor area is 440.8K sq.m.)
- Intransparency of project`s participants.
- The FREO certificates as an investment instrument have not gain expected popularity in Ukraine, which may lead to Issuer`s failure in meeting its commitments on the obligations.
- The project`s implementation is currently on the initial stage.
- 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
