OREANDA-NEWS. RusRating has changed its outlook on the credit rating assigned to ZAO RegionInvest (Moscow) from “stable” to “negative”. The rating itself is unchanged at "BB" on the international scale and "BBB" on the national scale.

The rating is based on business ties to Peresvet Bank, solid ties to a major real estate development group, and successful experience with major residential construction projects.

Constraining factors include high uncertainty risks associated with a new development project, a high debt burden, a limited market presence and high currency risks.

The change in outlook (from “stable” to “negative”) reflects a general weakening of real estate market conditions, which has reduced the stability of the Company’s business model.

ZAO RegionInvest is a private-sector Russian company. Its ultimate beneficiaries are seven private individuals who, in RusRating’s view, have close business ties to the Peresvet group and Peresvet Bank. The Company was set up in July 2008 and initially traded in real estate and securities. Currently it is developing micro-neighbourhood 2 on ul. Bondareva in the city of Dzerzhinski (Moscow region).

Business model stability is judged low. The main positive factors are close business ties to Peresvet Bank and the potential for attracting new projects. The debt burden appears very high, but would fall significantly if the project is largely completed. Profitability is weak: anticipated costs exceed predicted revenues. Assets consist mainly of material reserves (old buildings to be demolished plus incomplete construction work). Loans from Peresvet Bank account for the bulk of liabilities. Overall risk sensitivity appears elevated. Liquidity is sufficient.