OREANDA-NEWS. On 21 March 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaBB- (uaBB minus) to UAH41.3m 2 Ѕ-year registered housing bonds (series A-C) to be issued by Dnepropetrovsk-based Production and Commercial Firm Budivel LLC (`Issuer` or `company`). The company`s principal activity is investing and construction, as well as retail and wholesale trade of building materials. Today the company constructs a trade and residential complex located in the city of Dnepropetrovsk. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2007 and its other inside information.

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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).

Factors maintaining the credit rating
The Issuer has experience in investing and construction, in fact it has delivered a residential building of 9.1K sq.m.
Issuer`s diversified income sources: the proceeds from ceramic tile sales made up UAH13.8m in 2007, or 39.5 percent of overall volume, with the proceeds from sanitary equipment sales amounting to UAH3.5m or 9.9 percent.
The real estate prices and demand have been stably growing over the past few years in the city of Dnepropetrovsk.

Factors constraining the credit rating
The Issuer does not have experience in housing bonds redemption.
The construction of the trade and residential complex located in 3, Stanislavskogo st., Dnepropetrovsk, is currently on the initial stage.
The size of the upcoming issue of UAH41.3m exceeds Issuer`s equity of UAH2m as of Dec. 31, 2007.
The proprietary rights for the building under construction, which premises are to redeem the bond issue, are under bank loan lien.
Instability in legislation and tax environment controlling both the construction industry and project financing.