print
10.04.2007
Upcoming bond issue by «Ternopilska Firma «Budivelnyk» assigned uaB credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB long-term credit rating to the upcoming issue of registered coupon bonds (A series) by Ternopil-based "Ternopilska Firma "Budivelnyk" Private Entity ("the Issuer" or "the company") for the amount of UAH 5m with the 3-year original maturity. The main company`s activity is residential and industrial construction. Today the company constructs 13 residential buildings and renovates industrial and office buildings in Ternopil and in the Ternopil`s suburb, the borough of Bila. In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 2002-2006 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.
Factors maintaining the credit rating
- The Issuer is one of the leading companies in the region`s residential construction, specifically the Issuer over the period of operation (since 1998) has constructed 9 residential buildings of 45.9K sq.m. total floor area.
- Issuer`s order portfolio is scheduled till 2009 year-end (for the bonds` redemption term), in fact 13 residential buildings of 86.3K sq.m. total floor area are to be complete, as well as a number of reconstruction and overhaul works.
- The Issuer is involved in construction activity in the city of Ternopil, where real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- Issuer`s detrimental performance according to 2002-2004 and 2006 totals, specifically the uncovered loss amounted to UAH 989.7K as of 31 Dec. 2006
- Issuer`s negative equity over 2002-2004 and 2006, in fact the equity amounted to
UAH
(-)755.4K as of 31 Dec. 2006 - The company does not have a financial plan for bonds` original maturity period.
- 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
