OREANDA-NEWS. On 24 December 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaB to registered housing bonds (series I-M) to be issued by Kiev-based Agrofirma Troyanda OJSC (`issuer` or `company`). The amount of the issue is UAH340.2m due Jul. 1, 2012. The company`s principal activity is investing and construction. Today the company implements a project aimed at construction of a residential complex with social facilities and a parking and at improvement of natural monument Kristerovaya Gorka located in the city of Kiev. In the course of analysis Credit-Rating considered issuer`s financial statements for 2003-2007 and 9M2008 as well as 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.

Factors maintaining the credit rating

The amount of funds invested in the construction of the mentioned complex, which is located 45, Vyshgorodska Str., Kiev, where premises of the 1st and 2nd stages are to redeem issues of bonds (including the upcoming one), is UAH184.8m or 9.4% of the project`s estimated cost.

The K.A.N. Development holding company, which incorporates K.A.N. Stroy LLC, which, in its turn, conducts construction works on the project, has necessary experience in construction.

Factors constraining the credit rating

Ongoing negative trends in Ukraine`s real estate sector, which curbs access to funding the construction activities.

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

The leasing rights for land plots located 45, Vyshgorodska Str., Kiev (housing bonds of the initial issue, issuer`s shares) and unfinished object, which premises to redeem the bond issues (including the upcoming one) are pledged as security for a loan.

Risks imposed by size of the project: the overall complex`s floor area, which construction is divided into 12 stages, is 451.2K sq.m.

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