OREANDA-NEWS. On 29 June 2009 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it downgraded to uaCC from uaB- (uaB minus) the long-term credit rating assigned to registered housing bonds (series A-X) issued by Crimea-based Krymska Yuridychna Grupa LLC (`issuer` or `company`). The amount of the issue is UAH87m, due June 30, 2009. The outlook on the rating has been changed to stable. The company`s principal activity is leasing of owned real estate property, arrangement and financing of construction, and consulting services. Today the company implements 2 construction projects located in the city of Alushta. In the course of analysis Credit-Rating considered issuer`s financial statements for 1Q2009 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

The amount of funding at the project on construction of a residential complex located Oktyabrska Str., Alushta, which construction is to be funded with series A-X bonds.

Factors constraining the credit rating

Issuer`s overdue obligations on interest and principal of loans.

High issuer`s dependency upon borrowed funds (the amount of issuer`s loans and credits was recorded at UAH305.3m as at March 31, 2009, which is 82.07% of the asset value).

The halt in construction works at residential project located in Oktyabrska Str., Alushta.

The major part of issuer`s property is pledged as security, including the proprietary rights for the building constructed, which is located in Oktyabrska Str., Alushta.

Issuer`s negative equity of UAH(74.3m) as at March 31, 2009.

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

Ongoing negative trends in Ukraine`s real estate sector.

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