OREANDA-NEWS. July 27, 2015. RusRating has lowered the credit rating to assigned to ZAO Stroitemp’s 01 bond series, from "BBB-" to “BB” on the national scale, 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 covering the entire bond series together with coupon revenues.

Constraining factors include the moderate debt burden of the ultimate borrower, difficult anticipated conditions in the metals industry and the lack of additional backing for the bonds.

About the Issue

The interest-bearing, documentary, non-convertible series 01 bonds (reg. no. 4-01-80031-N) have a total nominal value of R5bn and are scheduled for redemption on 13 November 2019 (a maturity of 1820 days). The coupon period is 182 days, with interest payments set at 9% per annum. The issue was organised by Troika-D Bank on behalf of a major financial-industrial group centred on Bank Rossiiski Kredit and its beneficiary owners (a consortium of investors).

The funds generated by the issue were invested in modernisation of the OEU Block No. 2 Anzherskaya-Yuzhnaya coal mine in Kemerovo region. The ultimate borrower is NPO Gidrougol [trs. HydroCoal Production and Research Association LLC]. This differs from the purpose stated prior to the issue.

About the Issuer

ZAO Stroitemp is a private-sector Russian company set up on 10 May 2006 whose General Director is Anton Sergeyevich Zhuravlev. Ownership changed hands in late 2014 and its immediate beneficiary is now Aston Grand, which acts on behalf of a major Russian financial-industrial group. Stroitemp is in effect an SPV.

The group centres on Bank Rossiiski Kredit, where A.L. Motylev is President and Chairman of the Board of Directors. Group 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 control assets in finance, construction, real estate management, retail and other sectors.