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-Credit Rating gives uaBBB rating to Arkada-Fond's bonds.

BANKING AND CREDIT NEWS-November 1, 2010--Credit Rating gives uaBBB rating to Arkada-Fond's bonds(C)2010 M2 COMMUNICATIONS

1 November 2010 - Credit Rating assigned today a long-term uaBBB rating to the UAH300m (USD37.7m/EUR27m) W series interest-bearing bonds of Ukrainian Arkada-Fond Mortgage Co.

The outlook is "stable".

The bonds, which will be sold in a private issue, mature on 23 August 2012.

An obligor or a debt liability with uaBBB credit rating is characterised with 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.

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

The rating is underpinned by the company's ability to secure needed funds from Arkada Joint-Stock Bank in exchange of purchased loans, due to its close operational links with the bank.

The rating is, however, constrained by the issuer's dependency on Arkada Joint-Stock Bank and its poor diversification of 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.

Another concern is the low indicators of the company's performance efficiency and the absence of supervision over core assets quality from the bank and supervisory authorities, which significantly raises credit risks under deteriorating environment in the real estate sector.

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Publication:M2 Banking & Credit News (BCN)
Date:Nov 1, 2010
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