OREANDA-NEWS. January 25, 2008. Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaBB to UAH58.8m 4-year registered discount bonds (D series) issued by Odessa-based Istok-2001 LLC, the agency's press service reports. The company's primary activity is investing and construction. Today, the company implements construction projects in the cities of Odessa and Mykolayiv. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2006 and 9M2007 as well as other inside information furnished by the Issuer.

An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions.

Factors maintaining the credit rating.

    * The Issuer is incorporated with the group of companies, which facilities empowers the Issuer to supply the construction process on almost all stages; the group`s companies have delivered 18 residential buildings of 101.9K sq.m. over the past 8 years; today the group implements 6 investment and construction projects of 100.3K sq.m.
    * The Issuer is engaged with organizing and financing the construction in the cities of Odessa and Mykolayiv, where real estate prices and demand have been growing over the past few years.

Factors constraining the credit rating.

    * Issuer's negative equity during 2002-2005 entailed by Issuer's detrimental performance in this period.
    * The issue size of UAH58.8m exceeds 12.5x the Issuer's equity of UAH4.7m as of Sep. 30, 2007.
    * Instability in legislation and tax environment controlling both the construction industry and project financing.