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25.04.2007
Bond issue by EKOSORB 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 (G series) by EKOSORB Ukrainian consortium (Issuer` or consortium`) for the amount of UAH 84m with the 2 Ѕ-year original maturity. The main consortium`s activity is investment and construction. Today the consortium constructs 8 residential buildings in the city of Kiev and in Kiev Oblast, in the cities of Rivne and Sevastopol. In the course of analysis Credit-Rating used Issuer`s financial statements for 2002-2006 as well as other inside information furnished by the consortium.
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
- Issuer`s experience of an investor in construction projects, in fact 4 residential buildings of c. 40K sq.m. have been set in operation, with 3 of them being multi-storied ones situated in Kiev, and one 5-storeyed situated in Rivne.
- The construction project to be financed by the funds raised from the bonds` placement is being implemented in Kiev Oblast, where real estate prices and demand have been growing in line with those of the city of Kiev.
Factors constraining the credit rating
- The Issuer does not have experience in housing bonds` redemption.
- The Issuer`s authorized stock amounted to UAH 192.6K as of Dec. 31, 2006, with the issue size being UAH 84m.
- The bond issue is to be redeemed by proprietary rights for premises in the residential building, situated in the borough of Tchaika, (Kiev-Svyatoshin district), which current readiness is on initial stage.
- Risks imposed by the project`s size, specifically, the Issuer is planning to set in operation 10 residential buildings of over 200K sq.m. total floor area. The construction is to be financed by the funds raised from the bonds` placement.
- 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 at in the REUTERS, BLOOMBERG and FTN MONITOR information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
