OREANDA-NEWS. April 20, 2010. Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it upgraded to uaBB from uaB the long-term credit ratings assigned to registered housing bonds (series K-M, N-S, W-Y) issued by Kiev-based Budspetsservice LLC (‘issuer’ or ‘company’). The outlook on the rating is stable. The amount of the issue is UAH121.5m, UAH169.4m, and UAH29.3m respectively to the series stated. The company’s principal activity is investing and construction. Today the company constructs a residential block with social facilities in the city of Kiev. To revise the rating Credit-Rating considered issuer’s financial statements for 4Q2009 and full 2009 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.

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

Factors maintaining the credit rating

The construction of residential buildings ##1, 2, 4 in the project located Podvisotskogo Str, in Pechersk Districts of Kiev, which premises to redeem the bond issues of K-M, N-S, W-Y series, are on the stage of completion.

The issuer has necessary experience in delivering residential buildings.

The amount of funding and the volume of works performed on the abovementioned project (as at 2009-end the volume of incomplete construction works on the project was recorded at UAH602.9m (an increase by UAH87.5m during 4Q2009).

The issuer may get necessary financial backing.

Factors constraining the credit rating

The issuer does not have experience in redemption of housing bonds.

Issuer’s negative performance indicators recorded in 2004-2009.

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