print
10.05.2007
Upcoming bond issue by Otdykh-service 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 housing bonds (B series) by Feodosiya-based Otdykh-service LLC (`company` or `Issuer`) for the amount of UAH 8.8m with the 2-year original maturity. Outlook on the rating is Positive. The main company`s activity is investment and construction. Today the company constructs 2 residential buildings in the city of Feodosiya. In the course of analysis Credit-Rating used Issuer`s financial statements for 2003-2006 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.
Positive Outlook exhibits a possibility for the rating`s upgrade in the course of the year on condition that the positive tendencies are retained and the current risks are reduced.
Factors maintaining the credit rating
- The Issuer as a customer has experience in 2 projects on construction of residential premises of 6.9K sq.m. total floor area.
- The Issuer is involved in residential construction on the southern coast of Crimea, where the real estate prices and demand have been growing over the past few years.
Factors constraining the credit rating
- The Issuer does not have experience in bonds` redemption.
- The bond issue is to be redeemed by residential and non-residential premises in the building which construction is on the stage of project`s arrangement.
- Issuer`s total liabilities on 2 issues (UAH 33.8m) 3.7x exceeds Issuer`s assets as of Dec. 31, 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
