OREANDA-NEWS. The rating is “BBB-” on the national scale with a stable outlook.

The rating is based on the support of a major Russian financial-industrial group and its beneficiary owners and a guarantee issued by a leading Russian bank that ranks among the country's top thirty by assets, covering both principal and interest payments on the bonds.

Constraining factors include the high debt burden of the ultimate borrower: a major metals firm located in the Urals that has operated at a loss in recent years.

About the bonds:

The interest-bearing, documentary, non-convertible series 01 bonds with a five-year maturity have a total nominal value of R5bn. The coupon period is 182 days, with interest payments set at 9% per annum. The debt is being issued on behalf of a major metals firm in the Urals and will serve to re-finance existing loans.

About the issuer:

ZAO Stroitelno-Finansovy Market is a private-sector Russian company set up on 25 May 2006 that effectively serves as an SPV on behalf of another borrower. Its assets consist mainly of private debt issued by a Russian bank, while bank loans account for the bulk of liabilities. The term structures of assets and liabilities are balanced. Liquidity is sufficient.

About the ultimate borrower:

The ultimate borrower is a major nickel producer in the Ural federal district that belongs to a larger metals group. The company controls its own production facilities.

The company's debt burden is high and its operating margin is negative. Accounts receivable make up the bulk of assets and more than half are long term. Risk sensitivity is high. Assuming that current obligations are re-financed successfully liquidity is sufficient.