OREANDA-NEWS. RusRating has placed the credit rating assigned to OOO Noviye Promyshlenniye Sistemy – "BB" on the international scale and "BBB" on the national scale, in both cases with a negative outlook – on its watch list. This means that the rating and rating prognosis could change (either rise or fall) in response to additional information received from the Company or identified in public sources.

The rating is based on loan guarantees provided by the owner of the MetroMall2 retail facility, the market value of whose assets exceed the Company’s financial debt and annual interest obligations, as well as its own debt and interest obligations (including on all guarantees); plus close business ties between the Company’s owners and BFG-Credit Bank and so a high probability of refinancing in the event of unfavourable macro-economic developments.

Constraining factors include a possible decline in demand for commercial real estate in response to a weakening macro-economic environment in Russia; the absence of current operating revenues; and the resulting high debt burden.

The negative outlook reflects the high (in RusRating’s view) likelihood that the project will be suspended in response to current uncertainty in the Moscow market for commercial real estate, plus a low occupancy rate.

About the Company

OOO Noviye Promyshlenniye Sistemy is a limited liability company set up in 2010 that has taken in bank loans and invested in the purchase and renovation of the MetroMall2 retail centre in Moscow. Legally the Company has no property rights to any part of the facility, but all loan obligations are backed by guarantees issued by the property owner. The 18 800 m2 MetroMall2 retail facility (Dmitrovskoye hwy. 62) is located next to the Verkhniye Likhobory station on the Lyublinsko-Dmitrovskaya metro line, which is scheduled to open in 2016.

Assets consist mainly of accounts receivable ultimately linked to investments in the MetroMall2 facility, while most external liabilities are BFG-Credit Bank loans. Liquidity is sufficient. Risk sensitivity is very high.

The strategy adopted by the Company’s owners calls for the sale of small blocks of floor space in the MetroMall2 facility up until June 2015 at a price of R262 000 per square metre. This price is competitive and will cover all outstanding debt and interest obligations, both of the Company itself and of the property owner (including conditional obligations under guarantees).