OREANDA-NEWS. RusRating has lowered OOO StroiEkologia’s credit rating from "BB" to “B+” on the international scale and from "BBB" to “BB+” on the national scale, in both cases with a negative outlook.

According to the agency, the rating cut reflects the realisation of currency risk (a falling rouble-dollar exchange rate); an increased debt burden; uncertainty in the Moscow and Moscow region real estate market; and a possible further delay in the start of construction and resulting increase in the cost of the Pelegrina development project.

The rating itself is based on strong support from the Company's owners, a high anticipated operating margin and internal rate of return on the Pelegrina project, the project's social orientation (aimed at providing comfortable and affordable economy-class housing) and official backing.

Constraining factors include high uncertainty risks on a new business project that has remained in its initial stages for an extended period, a high debt burden and a limited market presence.

About the Company

OOO StroiEkologia is a limited liability real estate development company set up in June 2003. Its current project is the mid-rise Pelegrina Residential Complex, located in Moscow region, with a planned floor space of 379 000 square metres. The Company's ultimate beneficiary owners are citizens of Russia and Ukraine with substantial financial resources and experience in real estate development and access to official backing.

At this time the Company's debt burden is extremely high and currency risk is likewise high. Revenues are insignificant. Liquidity is sufficient. Risk sensitivity is high. Cash flows are expected to improve substantially once the project is under way: a large increase in revenues will improve operating returns and allow StroiEkologia to cut its debt burden. On the basis of official accounts most assets take the form of investments in affiliated companies, which arose in connection with financing for the early stages of the project. Prospects for re-financing obligations are judged strong thanks to the Company's considerable experience in accessing resources and the support provided by its owners.