OREANDA-NEWS. RusRating has assigned a credit rating to EFG mortgage participation certificates. The rating is "BBB" on the national scale, with a stable outlook.

The rating is based on the high market value of the underlying collateral, which is well in excess of the debt principal; the healthy creditworthiness of the ultimate borrowers; and their ties to a major Russian financial-industrial group.

Constraining factors include the absence of information of cash flows generated by the property and high interest charges on the associated mortgages.

About the certificates

Rules governing the EFG mortgage participation certificates (state registration number ISU-0003, ISIN RU000A0JUA37) were registered on 29 August 2013 by the Federal Financial Markets Service. The securities have been admitted to top-level trading on MICEX. They are managed by CJSC "EFG Asset Management". The book value of the underlying mortgages, which carry an interest charge of 17% per annum, is R3.07bn. The certificates have a maturity of 2.65 years.

About the mortgages

The underlying mortgages were taken out by ZAO Korporatsia A.N.D. and ZAO Oriteks.

The Korporatsia A.N.D. mortgage is backed by property collateral in the form of a 11 079.8 square metre non-residential building in Moscow (ul. Kantemirovskaya 61) plus 8995 square metres of adjacent land, both of which are held by the company under lease. These assets have been valued by an independent assessor at R3.35bn.

The Oriteks mortgage is backed by 12 296 square metres of land together with a 15 352.3 square metre non-residential building located on that land (Moscow, Volgogradski prospect 32, korp. 23 and 31). Both the land and the building are owned by the company and together have been valued by an independent assessor at R3.35bn.

About the borrowers

ZAO Korporatsia A.N.D. is a Russian real estate development company that was registered on 8 April 2014. ZAO Oriteks is likewise a Russian real estate developer, registered on 27 July 2005.

Both companies have close business ties to a major Russian financial-industrial group with interests in banking, oil production and refining, and real estate, particularly in Moscow and Moscow region. The group's assets exceed R0.5trn.