RusRating Assigns Credit Rating to Evrazia Nedvizhimost
OREANDA-NEWS. RusRating has assigned a credit rating to OOO Evrazia Nedvizhimost (Domodedovo, Moscow region). The rating is “BBB” on the national scale and “BB” on the international scale, in both cases with a stable outlook.
The rating is based on the substantial market value of the Company's real estate assets, a high internal rate of return on its real estate development project, and strong support from its beneficiary owner.
Constraining factors include a high debt burden, high uncertainty risks associated with the development project as construction approaches completion, significant currency risks, and a small market presence.
OOO Evrazia Nedvizhimost [trs. Eurasia Real Estate LLC] is a Russian real estate developer that owns more than 1.5 million square metres of land in north Domodedovo, where the third phase of Russia's largest warehouse logistics complex (Severnoye Domodedovo) is currently under construction. It also controls a gas-burning generating facility and a step-down electrical substation. Major Russian banks have invested in the development project, as has the facility's largest lessee, ZAO SP Evrazia M4 [trs. Eurasia M4 Joint Enterprise CJSC].
The Company's debt burden is very high but its operating margin is healthy. Once construction is complete operating cash flows are expected to increase considerably, lowering the debt burden and altering the structure of revenues. Two bank loans - rouble financing from Russian Credit Bank and a dollar loan from B&N Bank - account for the bulk of outstanding debt. Assets include 1.5 million square metres of land in north Domodedovo, a gas-energy plant and electrical substation, and financial investments (a loan). Risk sensitivity is moderate. Liquidity is sufficient.
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