OREANDA-NEWS. On 01 July 2009 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaCCC from uaB the long-term credit rating assigned to registered housing bonds (series A and series B) issued by Zaporizhzhia-based Konstanta LLC (`issuer` or `company`). The amount of the issue is UAH106.3m and UAH136.2m (respectively to the series stated), with 3 Ѕ-year original maturity. The outlook on the rating has been changed to stable. The company`s principal activity is investing and construction. Today the company implements 4 construction projects located in the city of Zaporizhzhia. In the course of analysis Credit-Rating considered issuer`s financial statement for 1Q2009 and its other inside information.

An obligor or a debt liability with uaCCC credit rating is characterized with the VERY LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. There is a default possibility.

Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.

Factors maintaining the credit rating

The issuer has necessary experience in investing and construction: in fact the company implemented 12 projects of over 57.3K sq.m. over its 14-year operating period.

According to the company, the construction readiness of a residential complex located Borodinska Str. Zvezdny Lane, Zaporizhzha (which premises to redeem the series A bonds) is around 70% as at March 31, 2009.

According to the company the construction readiness of a residential complex located 3Б, Gryaznova Str., Zaporizhzhia (which premises to redeem the series B bonds) is around 38% as at March 31, 2009.

Factors constraining the credit rating

The issuer does not have experience in redemption of housing bonds.

A considerable deceleration in construction of the residential complex located Borodinska Str. Zvezdny Lane, Zaporizhzha (which premises to redeem the series A bonds), and in construction of the residential complex located 3Б, Gryaznova Str., Zaporizhzhia (which premises to redeem the series B bonds).

Opacity with regard to refinancing issuer`s obligations under adversities in the financial market, combined with a significant portion of short-term obligations in the company`s overall debt.

Ongoing negative trends in Ukraine`s real estate sector.

Instability in legislation and tax environment controlling both the construction industry and project financing.