OREANDA-NEWS. On 23 March 2009 was Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaBB from uaBBB- (uaBBB minus) the long-term credit rating assigned to registered coupon bonds (series A) issued by Kiev-based Financial Group Strakhovi Tradytsiyi CJSC (`issuer` or `company`). The amount of the issue is UAH15m, due Sep. 16, 2010. The outlook on the rating has been changed to negative. To revise the rating Credit-Rating considered issuer`s financial statements for 2H2008 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.

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

Growth in the volume of insurance payments, specifically the amount of gross premiums raised in 2008 exceeded UAH183m, with UAH140.5m premiums earned, which is higher 2.4x and 3.1x respectively, as compared with 2007.

The specific gravity of operating expenditures in the payments earned retained low and accompanied by moderate combined loss indicator.

Factors constraining the credit rating

Sharp decline in quality of the assets, which represent the issuer`s insurance reserves.

Insufficient growth rates of the equity, which size as of Jan. 1, 2009 was 28% lower than the volume of insurance reserves, which is taking place under decreasing share of investment portfolio in the asset structure.

Insufficient balance of the issuer`s insurance portfolio, which is concentrated in volunteer motor insurance, which specific gravity was in excess of 77% in 2008.

Growing impact of external factors on the financial market and deteriorating business activities in certain economy sectors; this prompts solvency erosion and negatively affects the issuer`s liquidity.