OREANDA-NEWS  On 05 November Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaB- (uaB minus) to registered housing bonds (series A-L) to be issued by Dnepropetrovsk-based Konkuritto LLC (`issuer` or `company`). The amount of the issue is to be UAH308.5m due Dec. 31, 2013. The company`s principal activity is investing and construction. Today the company constructs a multi-functional complex located in the city of Dnepropetrovsk. In the course of analysis Credit-Rating considered issuer`s financial statements for 2006-2007 and 1H2008 and its other inside information.

An obligor or a debt liability with uaB credit rating is characterized with the LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is extremely susceptible to 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 volume of funds invested in construction of the multi-functional complex located 43, Mandrikovska Str., Dnepropetrovsk, which premises to redeem the bond issue, is currently UAH51.1m as of Sep. 12, 2008 or 13% of the project`s estimated cost.

Factors constraining the credit rating

The issuer does not have experience in implementation of investment and construction projects, neither in redemption of housing bonds.

The amount of the upcoming issue of UAH308.5m exceeds size of issuer`s assets of UAH35.7m as of June 30, 2008.

Issuer`s detrimental performance in 2006-2007 and 1H2008 coupled with issuer`s negative equity of (UAH4m) as of June 30, 2008.

Issuer`s significant debt burden: the volume of issuer`s liabilities on the bank loan amounts to UAH37.4m as of June 30, 2008, which is 104.9% of the liabilities.

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