OREANDA-NEWS. RusRating has assigned a credit rating to mortgage bonds issued by ZAO Ipotechny Agent "Moskovski”: "BBB-” on the national scale and "BB-” on the international scale, in both cases with a stable outlook.

The rating is based on an established pool of office lessees that generate sufficient revenues to service obligations on the underlying mortgage, plus capitalisation of the remaining revenues at a modest rate of interest sufficient to pay down the loan principal; the high market value of the property collateral; the legal form of the issuing company's owners (Dutch stichtings that rule out risks to both issuer and bondholders from this source); substantial experience acting as a mortgage bond agent for OOO TMF Rus; and the strong support provided to ZAO Legion Development (the borrower/mortgagor) by its owner.

Constraining factors include the risk of a possible decline in the cash flow generated by leases, whether from a lower occupancy rate or a decline in leasing charges.

About the Bonds:

The non-convertible documentary interest-bearing mortgage-backed bonds (IA Moskovski series 01), with a nominal value of R12bn and due for redemption on 17 September 2028, were issued in order to provide ZAO Legion Development with a mortgage certificate suitable as backing for a loan. The bonds were registered by the Central Bank of Russia on 7 August 2014, with registration number 4-01-81918-N.

About the Mortgagor:

ZAO Legion Development is a Russian real estate development company that owns a class "A” business centre whose three buildings have roughly 60 000 square metres in floor space. The facility is located one kilometre from the Kremlin at 40 Bolshaya Ordynka Street (structures 3, 4 and 5) in the Zamoskvorechye neighbourhood, on an enclosed and secure property. The company's other assets include R11.9bn in financial investments. Most of its liabilities are securitised mortgage loans. Its debt burden is elevated but operating revenues are strong. Risk sensitivity is moderate. Liquidity is sufficient.

All shares in the company are held by Cyprus-registered Masnou Holding Limited. According to reports in the public domain, its ultimate beneficiary owner is Danil Khachaturov, a Russian billionaire with an estimated worth of USD 2.4bn (according to Forbes magazine) and the owner of the Rosgosstrakh insurance group (R151bn in assets) plus various Moscow real estate.