Stroikompleks’ Upcoming Issue Receives uaBB+ Rating

      Credit-Rating, a nationally recognized credit rating agency in Ukraine, reported that it had assigned a long-term credit rating of uaBB+ to Yevpatoriya-based VAT Stroikompleks’ upcoming issue of registered special-purpose (E, F series) bonds worth 5.3 million hryvnias with a maturity of 1 year.

      Stroikompleks’ principal activity is investment and construction. The company is currently engaged in developing a residential housing project in Yevpatoriya, Crimea. In the course of its analysis, Credit-Rating considered the issuer’s financial statements for 2002-2007. It also considered internal information provided by the company.

      A borrower or a debt instrument with uaBB+ credit rating has lower than sufficient creditworthiness when compared with other Ukrainian borrowers or debt instruments. This level of creditworthiness is highly susceptible to adverse changes in commercial, financial and economic conditions. The plus (+) or minus (-) modifiers indicate intermediary rating categories.

      Factors supporting the credit rating:

      – The issuer has experience with investment and development projects: During 2002-2007 it completed 33 projects for residential, commercial, and recreational purpose. By of beginning of 2008, 62 percent of the construction budget for the housing project in Yevpatoriya (7th micro-district) had been used.

      – Availability of facilities and resources to service the project during all stages of its development.

      – Growing price and demand for residential housing in Crimea.

      Factors limiting the credit rating:

      – Issuers lack of experience in redeeming special-purpose bonds with property.

      – Unprofitable results for 2003-2007: As of Dec. 31, 2007, the uncovered loss had amounted to 16 million hryvnias.

      – The regulations concerning residential development and financing are vague and subject to change, as are tax regulations on development projects.