Credit-Rating notes that the introduction of a ban on raising funds in the construction sector before obtaining all necessary permitting documents for construction works will not considerably mitigate investment risks in the sector, as this ban repeats requirements set by the National Commission for Securities and Stock Market.
On May 11, 2010 Verkhovna Rada has passed a bill 2464 titled "On introduction changes to certain laws on enhancements of state regulatory policy in construction sector" which puts a ban for raising funds by financial institutions which are managing funds for construction financing before all necessary documents for performing construction works have been obtained. However in end of December 2007 the State Commission for Securities and Stock Market of Ukraine made amendments to procedures of bond issuances (#2371 of Dec. 27, 2007). They stated necessity of availability of all permitting documents with the issuer while making registration of issue of housing bonds. Thus, the procedure of raising funds for construction financing was sharpened already then.
Credit-Rating’s note: Over 380 of issues of housing bonds (or 85% of overall volume) in the amount of around UAH30bn have been rated by the agency in the speculative grade. For the majority of such issuers had a mix of risks, which realization in the crisis prompted failure or delay in payments on their obligations.
Credit-Rating agency has operated in the Ukrainian market since 2001 being committed to assignment of the national scale ratings. The agency has assigned 1081 ratings. As at May 1, 2010 the agency’s list of ratings included 638 ratings: 493 in corporate, 98 in financial and 47 in municipal sectors.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in Credit-Rating’s corporate web-site www.credit-rating.ua
, as well as in REUTERS and BLOOMBERG information systems.