OREANDA-NEWS. On 05 March 2009 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaCCC (provisional) to registered housing bonds (series A-D) issued by Kiev-based AS-MVK LLC (`issuer` or `company`). The amount of the issue is UAH78.6m due Dec. 31, 2012. The company`s principal activity is investing and construction. Today the company constructs a residential and office building with social facilities located in the city of Kiev. 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 uaCCC credit rating is characterized with the VERY LOW creditworthiness as compared to other Ukrainian obligors or debt liabilities. There is a default possibility.

Factors maintaining the credit rating

The issuer owns a land plot of 0.1943 ha located 21, Vorovskogo Str., Kiev, on which the building is being constructed.

Factors constraining the credit rating

Ongoing negative trends in Ukraine`s real estate sector.

The amount of the bond issue of UAH78.6m exceeds the size of issuer`s assets of UAH16.9m as of June 30, 2008.

Issuer`s detrimental performance during 2006-2007 and 1H2008 coupled with its negative equity of UAH4.6m as of June 30, 2008.

Issuer`s significant debt burden: the amount of obligations on bank loans is UAH21.2m as of June 30, 2008, which accounts for 135.9% of liabilities.

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

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