OREANDA-NEWS. December 3, 2007. Credit-Rating, a nationally recognized credit rating agency in Ukraine today assigned a long-term credit rating of uaBB- (uaBB minus) to UAH22m 3-year registered housing bonds (D series) issued by Kiev-based Ekobud LLC. The company's primary activity is investing and construction. Today, the company implements 7 construction projects in the city of Kyivv, in the Kyivv Oblast, and in the city of Sumy. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2001-2006 and 1H2007 as well as other inside information furnished by the company.

An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.

Factors maintaining the credit rating:

The Issuer as a general contractor has experience in implementation of 3 construction projects, including one of 18.3K sq.m. constructed by the Issuer as a customer with 2 another ones of 48K sq.m. ordered by the Issuer and being currently completed (99 and 80 per cent readiness).
The Issuer sales grew in 2002-2007 coupled with the company`s lucrative performance in 2006 and 1H2007 with the consolidated net profit accounting for UAH9.2m.
The Issuer does not have proprietary rights for premises deposited under a banking loan in 48a, Prokofyeva str. city of Sumy, which shall redeem the bond issue.

Factors constraining the credit rating:

The Issuer suffers from the lack of experience in the redemption of housing bonds.
The construction of a residential complex in 48a, Prokofyeva str., Sumy is currently on the initial stage.
The Issuer's obligations on the funds attracted to construction financing, namely special purpose financing, banking loans and housing bonds, all amounting to UAH157.6m exceed significantly the Issuer's equity of UAH8.6m as of Jun. 30, 2007.
Instability in legislation and tax environment controlling both the construction industry and project financing.