OREANDA-NEWS. RusRating has lowered the credit rating on 01 series bonds issued by OOO Region-Invest (Moscow) from “BBB” to “BBB-“, with a stable outlook.

According the agency, the rating cut reflects the absence of security for the bonds.

The rating is based on the support of a major Russian financial-industrial group and its beneficiary owners plus healthy asset quality.

Constraining factors include the Company’s relatively small size; potential cash flow gaps between coupon revenues held in its bond portfolio and coupon payments due on its own bonds; and high risks in the Russian securities market.

About the Issue

The R3bn, interest-bearing, documentary non-convertible 01 bond series (official registration number 4-01-36446-R, RU000A0JUUB9) has a maturity of 1820 days and a coupon period of 182 days, with payments set at 10.5% per annum. The funds generated by the issue have been invested in eurobonds issued by Russian borrowers. The bonds were placed on 19.09.2014 and are due for redemption on 12.09.2019.

About the Issuer

OOO Region-Invest is a private-sector limited liability Russian company set up on 6 December 2010 that in effect acts as an SPV for a major Russian financial-industrial group with more than R0.5trn in assets. The group’s business centres on oil production and trading, construction and management of real estate, finance and credit. The Company’s R3bn bond issue has been used to finance the purchase of eurobonds issued by reliable Russian borrowers such as Gazprombank, Russian Agricultural Bank, Alfa-Bank and RusHydro.

The Company’s assets consist of financial investments (a portfolio of quality Russian eurobonds), while outstanding bonds make up the bulk of liabilities. Capital’s share of the balance sheet is insignificant. Liquidity is sufficient; possible cash flow gaps can be covered by short-term loans from firms in the above-mentioned financial-industrial group. Overall risk sensitivity is elevated.