OREANDA-NEWS  On 09 October Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it upgraded to uaBB from uaB the long-term credit rating assigned to registered housing bonds (series F-L) issued by Kharkiv-based Kharkivzhylbud-1 LLC (`issuer` or `company`). The amount of the issue is UAH30.3m, with 4-year original maturity. The company`s principal activity is investing and construction. Today the company accomplishes funding of construction of a premium-class residential building located in the city of Kharkiv. To revise the rating Credit-Rating considered issuer`s financial statements for 2Q and 1H2008 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.

Factors maintaining the credit rating

The issuer`s owner Trest Zhylstroy-1 OJSC has experience in construction activities: in fact this company has commissioned over 250K sq.m. of residential premises over the past few years.

The issuer has experience in redemption of series A-E bonds, which were issued for funding the construction of a residential building located 32A, Geroyev Truda Str.

Factors constraining the credit rating

Issuer`s extreme dependency upon Trest Zhylstroy-1 OJSC.

A part of apartments in the building located 25, Rimarska Str., Kharkiv, which are to redeem the series F-L bonds, are pledged as security for a bank loan granted to Trest Zhylstroy-1 CJSC.

Issuer`s low performance indicators recorded over the past few years.

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