Credit-Rating Assigns Arkada-Fund LLC Bonds uaBBB
OREANDA-NEWS. January 28, 2011. Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned its long-term credit rating of uaBBB with stable outlook to registered coupon bonds (series X) issued by Kiev-based Arkada-Fund Mortgage Company (‘issuer’ or ‘company’). The amount of the issue is UAH100m due Aug. 23,
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is 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 issuer is capable of raising necessary funds from Arkada Joint-Stock Bank PJSC (rated uaBBB) in exchange of purchased loans, because of close operating links with the bank.
Company’s growing capitalization in 3Q2010 combined with insignificant amount of overdue debts in the structure of core assets.
Factors constraining the credit rating
Issuer’s dependency upon Arkada Joint-Stock Bank PJSC combined with poor diversification of issuer’s investments, which under progressively deteriorating environment in the stock market and real estate sector may considerably impair cash receipts necessary for settlements on own obligations.
Low indicators of issuer’s performance efficiency.
Absence of supervision over quality of the core assets (which is the primary source of cash receipts for settlements by issuer’s obligations) from the bank and supervisory authorities, which significantly raises credit risks under downturn in the real estate sector.
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