Credit-Rating Assigned Stroykompleks Upcoming Bond Issue uaBB plus
OREANDA-NEWS. On 15 April 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaBB+ (uaBB plus) to registered housing bonds (series E, F) to be issued by Evpatoriya-based Stroykompleks OJSC (`Issuer` or `company`). The amount of the issue is UAH5.3m, with 1-year original maturity. The company`s principal activity is investing and construction. Today the company constructs a series of residential buildings located in the city of Evpatoriya (Autonomous Republic of Crimea). In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2007 as well as its other inside information.
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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Factors maintaining the credit rating
The Issuer has experience in investing and construction: in 2002-2007 it delivered 33 residential, commercial and recreational facilities, with 20 of them being residential buildings of 71.1K sq.m. total floor area.
The construction of a residential building (#5) located in 5th district of Evpatoriya, which premises to redeem the bond issue has been invested significant funds (as of 2008-beginning 62% of the project`s estimated cost).
The Issuer has at its disposal production facilities, which empowers it to supply the construction process on almost all stages.
The real estate prices and demand in the recreation area of Crimea have been constantly growing over the past few years.
Factors constraining the credit rating
The Issuer does not have experience in redemption of housing bonds.
Issuer`s detrimental performance in 2003-2007, with its uncovered loss making up UAH16.4m as of Dec. 31, 2007.
Instability in legislation and tax environment controlling both the construction industry and project financing.