OREANDA-NEWS  On 03 December Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaB from uaBB the long-term credit rating assigned to registered coupon bonds (series A-C) issued by Odessa-based Intostroy Industrial and Construction Group (`issuer` or `company`). The amount of the issue is UAH70.5m due Oct. 30, 2013. The outlook on the rating is negative. The company`s principal activity is investing and construction. Today the company as a customer and investor constructs 7 buildings in the city of Odessa. To revise the rating Credit-Rating considered issuer`s financial statements for 3Q2008 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.

Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.

Factors maintaining the credit rating

The issuer has necessary experience in construction activities and buildings commissioning (the company has built 8 residential buildings in the city of Odessa of over 50K sq.m. total floor area);

The issuer operates facilities, which enable it to supply the construction process on almost all its stages.

Factors constraining the credit rating

Delays in building commissioning coupled with erosions in funding the company`s ongoing projects.

Issuer`s information opacity.

Incompliance in parameters of issuer`s bonds with those common in the market (i.e. with the parameters pursuant to which the coupon payments are to take place quarterly or semiannually).

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

Negative ongoing trends in Ukraine`s real estate sector.

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