OREANDA-NEWS. RusRating has lowered the credit rating assigned to the Zabaikal Region Guarantee Fund from "AA-" to “A+” on the national scale and from "BBB-" to “BB+” on the international scale, in both cases with a stable outlook. 

The rating cut reflects a decline in capital adequacy.

The rating itself is based on minimal pay-outs on the Fund’s guarantees, a well-diversified guarantee portfolio, healthy asset quality and state backing.

Constraining factors include low capital adequacy and the regional government’s large budget deficit.

OOO Garantiiny Fond Zabaikalskogo Kraya [trs. Zabaikal Region Guarantee Fund LLC] was set up in 2008 to offer guarantees to small and mid-sized businesses in Zabaikal region. The fund is wholly owned by the regional authorities.

Own funds consist mainly of supplementary capital accessed in the form of government subsidies; capital adequacy is low. The Fund’s principal obligations are off-balance guarantees; this portfolio is well diversified by both maturity and counterparty, but a single partner bank plays a significant role. Asset quality is healthy: bank deposits make up the bulk of the balance sheet, concentration by banking counterparty is high, and the liquidity of assets is judged moderate. Interest income covers operating costs in full, while guarantee pay-outs are relatively modest. Overall liquidity is sufficient. Risk sensitivity is low.