OREANDA-NEWS. On 23 July 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine has announced that it assigned a long-term credit rating of uaBBB registered housing bonds (series A-U) to be issued by Kharkiv-based Klasykzhylbud PV (`issuer` or `company`). The amount of the issue is to be UAH36.3m, with 1 ½-year original maturity. The company`s principal activity is investing and construction. Today the company constructs a residential building with installed public and office facilities with underground parking garage located in the city of Kharkiv. In the course of analysis Credit-Rating considered issuer`s financial statements for 2005-2007 and 1Q2008 as well as its other inside information.

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

Factors maintaining the credit rating

The bond issue is guaranteed by the issuer`s owner Trest Zhylbud-1 OJSC, which recorded net sales in 2007 and 1Q2008 of UAH182.8m and UAH86.4m respectively, with the sales profitability being at 17.3% and 18.9% respectively.

The issuer has experience in construction activities, in fact it has delivered over 250 sq.m. of residential premises over the past 10 years.

The issuer owns production facilities and structural subdivisions, which empower it to supply the construction process on almost all stages.

The issuer has successfully redeemed the housing bonds of C1, D1, E1, F1, G1 series.

Factors constraining the credit rating

Issuer`s extreme dependency upon Trest Zhytlobud-1 OJSC, which successful performance is contingent upon size of the construction projects and order portfolio.

Instability in legislation and tax environment controlling both the construction industry and project financing.