OREANDA-NEWS. July 27, 2015. RusRating has lowered the credit rating to assigned to the BO-01 bond series issued by Transgazservis, 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 cancellation of the banking license of the bonds’ primary guarantor and reduced capacity for support from the parent financial-industrial group.

The negative outlook is based on high regulatory risks affecting that same group.

The rating is based on backing in the form of a public put option provided by  Tekhnomark that covers the entire bond series together with coupon revenues, plus backing in the form of a capital stake in Profit Trade, the company behind the Agroholding project.

Constraining factors include high risks associated with an investment project in its early stages and the lack of additional backing for the bonds.

About the Issue

The five million non-convertible, interest-bearing, documentary, centrally-held bearer exchange bonds (series BO-01) have a nominal value of one thousand roubles each (R5bn in total) and come due 1820 days from the issue date (14.11.2014), i.e. on 08.11.2019. Placement took place via open subscription and was organised by the investment company RONIN. The securities include provisions for early redemption at the initiative of bondholders.

About the Issuer

OOO Transgazservis is a Russian SPV company registered in 2009 that issues bonds on behalf of a major financial-industrial group. It conducts no other business activity.

Pyotr Valerievich Sidorov is General Director of the Company, whose ultimate beneficiary is Ivan Alexandrovich Dolgikh. The group’s central entity is Bank Rossiiski Kredit, where A.L. Motylev serves as President and Chairman of the Board of Directors. Operations are shaped mainly by a consortium of investors that, in addition to Motylev, includes V.V. Lukoyanov, G.V. Gens, V.P. Fayerovich, B.G. Khait and Y.V. Vikhoreva, who have interests in finance, construction, real estate development, retail and other sectors.

The funds generated by the issue are earmarked for the Agroholding project, which aims to develop an agricultural cluster in Tula region on behalf of the above-mentioned financial-industrial group. Specifically the project involves development of the Yefremov and Suvorov poultry (egg) plants plus construction of a new poultry plant, greenhouse facilities and a pig-breeding farm.

The issuer had previously placed and redeemed a R3bn bond series.