OREANDA-NEWS. RusRating has raised the credit rating assigned to the 04 bond series issued by JSC TGK-1 (St. Petersburg) from “AA-” to “AA” on the national scale and from “BBB-” to “BBB” on the international scale, in both cases with a stable outlook.

According to the agency, the rating increase is based on a steady improvement in financial results.

The rating itself is based on the issuer’s strong presence in the market for electricity and heating services in north-west Russia, its position as a monopoly local provider in both areas, a moderate debt burden, a favourable assessment of corporate governance and strong support from the company’s owners.

Constraining factors include a moderate operating margin, heavy dependence on regulated rates, and the issuer’s relatively modest size compared to Russia’s leading companies.

The ten-year, R2bn non-convertible interest-bearing documentary bond series is being used to finance construction of a 450 MW gas-vapour turbine at the Pravoberezhny generating facility. The bonds are indexed for inflation: each coupon (starting from the second) pays 1.5 per cent per annum plus an adjustment for the annual rise in the consumer price index calculated for the most recent completed financial year.