Credit-Rating confirms the rating of Odesa at uaАА-, determines investment attractiveness at uaINV5 (the highest level) Credit-Rating confirms the rating of Odesa at uaАА-

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Expert Opinion


Volume of housing bond issues to shrink

Credit-Rating foresees the number of housing bond issuances to be decreasing in 2008. It is primarily associated with the toughened requirements for registration of issues imposed by transitory provisions of the Law of Ukraine `On securities and stock market`, which limit size of issue versus issuer`s equity. Considering peculiarities of the construction business, which envisage attraction of significant funds that often exceed not only the equity but also the asset balance, we may forecast the issuers will have to increase their equities or to involve third parties to projects. Alternatively, there is a possibility for further rebound in share of large construction companies-bond issuers, the fact contributing to improved quality of loans, and, consequently to reduced credit risks in the construction niche of the debt market.

`The market of residential construction will remain one of the fastest growing businesses in Ukraine in 2008` Dmitriy Zadesenets, head for Credit-Rating`s specialized department said. This statement may be proved with volume of housing bonds already issued. The face value of the issues rated amounted to UAH16.3bn in 2006-2007 with UAH1.2bn of them called for redemption in 2007 and UAH1.3bn to be redeemed in the current year.

We may also note the fact that the construction companies have issued coupon and discount bonds, which face value made up UAH0.7bn and UAH6.3bn respectively. Moreover, the past year saw first pilot issuances of certificates of real estate operation funds, which managing companies have issued certificates for about UAH1bn face value.

The leading regions in terms of constructing volumes in 2008 remain Kiev, Dnepropetrovsk, Odessa, Kharkiv and coastal cities in Crimea.

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Sergey Rozumyak +38 044 490 25 50

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