Credit-Rating Assigned Keramist`s Upcoming Bond Issue uaBBB-
OREANDA-NEWS. On 06 May 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaBBB- (uaBBB minus) to registered housing bonds (series A, B) to be issued by Zaporizhzhia-based Trade and Industrial Transnational Corporation Keramist (`issuer` or `company`). The amount of the issue is UAH48.4m, with 10-year original maturity. The company`s principal activity is production of cable and wires, polyvinylchloride articles, and investing and construction. Today the company constructs a residential building located in the city of Yalta (Autonomous Republic of Crimea). In the course of analysis Credit-Rating considered issuer`s financial statements for 2003-2007 as well as its other inside information.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is 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 is incorporated with the legally informal Keramist group, which operates in production of building materials, lime for metallurgy, polyvinylchloride articles, asphalt emulsion and polygraphy, which allows for differentiation of income sources.
Oporyadzhbud CJSC-31, which is a general contractor of construction of the residential building located 18a, Marx St., Yalta, has necessary experience in construction.
The real estate prices and demand have been stably growing over the past few years in Yalta.
Factors constraining the credit rating
Risks imposed by redistribution of cash flows within the group, which makes the Issuer vulnerable to risks of the entire group.
Neither the issuer nor the group`s companies have experience in residential construction and housing bonds redemption.
Peculiarities of construction activities in Yalta, in fact restrictions on conducting construction from May to September.
Instability in legislation and tax environment controlling both the construction industry and project financing.