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12.04.2007
Upcoming bond issue by «Internationalist» OJSC 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 upcoming issue of registered housing bonds (E-I series) by Kharkiv-based "MJK Internationalist" OJSC ("the Issuer" or "the company") for the amount of UAH 17.8m due 30 Dec. 2008. The main company`s activity is investment and construction. Today the company constructs 3 residential buildings in Kharkiv region. In the course of analysis the "Credit-Rating" agency used Issuer`s financial statements for 2001-2006 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. The "+" and "-" modifiers denote rating`s relative status within major categories.
Factors maintaining the credit rating
- The Issuer as a Customer and Contractor has experience in residential construction; specifically December 2006 saw Issuer`s setting in operation the 4.7K sq.m. residential building in Kharkiv`s suburb, the borough of Tsirkuny.
- The Issuer is a Customer and a Contractor of a residential complex in Kharkiv`s suburb, the borough of Tsirkuny, where real estate prices and demand grow alongside with those of Kharkiv.
Factors constraining the credit rating
- Issuer`s information non-transparency.
- The company does not have experience in bonds` redemption.
- The planned issue size (UAH 17.8m) exceeds Issuer`s authorized capital (UAH 40.9K) as of 31 Dec. 2006.
- The planned issue is to be redeemed by residential premises in building #32, the borough of Tsirkuny, which construction 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
