OREANDA-NEWS. September 16, 2009. Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaCC from uaCCC the long-term credit rating assigned to registered housing bonds (series AA-DE) issued by Kiev Oblast-based Zhytloindbud LLC (‘issuer’ or ‘company’) for the amount of UAH81.2m due Oct. 20, 2009. The outlook on the rating is stable. The company’s principal activity is investing and construction. Today the company constructs a residential complex with social facilities located in Kiev Oblast. In the course of analysis Credit-Rating considered issuer’s financial statements for 2Q2009 and 1H2009 and its other inside information.

An obligor or a debt liability with uaCC credit rating is characterised with the VERY HIGH DEFAULT POSSIBILITY.

Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.

Factors maintaining the credit rating

According to figures reflected in the company’s financial statement for 2Q2009 the amount of funds invested in construction of the aforementioned residential complex, which is located in the borough of Petropavlivska Borschagivka (Kiev Oblast) was recorded at UAH31.01m.

Factors constraining the credit rating

The construction works on the abovementioned project have been halted.

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

Issuer’s volatile performance indicators.

Ongoing negative trends in Ukraine’s real estate sector.

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