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04.09.2007
Bond issue by Megapolis-DKS LLC assigned uaCCC credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine, has today announced the assignment of uaCCC long-term credit rating to UAH 72m 5-year issue of registered housing bonds (D-F series) by the Kiev-based Megapolis-DKS LLC (`Issuer` or `Company`). The company`s principal business is investment and construction. Today, the company plans to conduct a project for the construction of a trade and residential complex in the city of Lugansk. In the course of analysis, Credit-Rating considered the Issuer`s financial statements for 2005-2006 and 1Q2007 as well as other inside information furnished by the company.
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.
Factors maintaining a credit rating:
- The Issuer is involved in construction activities in the city of Lugansk, where the prices and demand have been growing over the past few years;
- Availability of all necessary permits for the construction of the trade and residential complex located near the intersection of Kotsyubinskogo Str., Volodarskogo Str. and the overhead road towards the railway station in the city of Lugansk. The construction will be financed due to the cash raised from the bonds offering.
Factors constraining a credit rating:
- The Issuer has no experience in carrying out investment and construction projects and in redemption of housing bonds by giving premises to their owners;
- The bonds will be redeemed by giving premises and parking places in the trade and residential complex to the owners, the construction of which is at initial stage;
- Total liabilities on two bond issues (UAH 125.8m) exceeded the Issuer`s assets (UAH 65.3m) by two times as of April 01, 2007;
- As of April 01, 2007, the Issuer`s equity had a negative value of UAH (-) 937 800;
- Instability of legislation and tax environment controlling both the construction industry and project financing.
Information on all the credit ratings, assigned in accordance with the Ukrainian National Scale, may be found in the REUTERS, BLOOMBERG and FTN MONITOR Information Systems.
For further information, please contact:
Information and Analytic Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
