Financial policy

Etalon Group has never failed to meet its debt obligations. The financial policy which allows such effective management and control of the Group’s commitments, is based on:

A prudent approach to financing: the leverage should not be higher than the industry average, while the terms of financing should be better. All debt servicing payments and refinancing procedures should be planned and implemented in advance;

Decreasing WACC: the reputation of the company allows us to choose the best offers from lenders including the effective cost of borrowing;

Increasing duration: housing is a capital-intensive process with a relatively long production cycle (over 2.5 years). With this in mind, the formation of the credit portfolio should focus on the duration of separate financial tools as well as the credit portfolio as a whole, so that the average duration equals or surpasses the production cycle;

Reducing the refinancing risk: Etalon Group adheres to the amortizing repayment schedule regarding all sufficient borrowings, and refuses put options;

Internal covenants: LenSpetsSMU commits to more stringent internal covenants than similar restrictions in loan documentations;

Innovations in financing: the stable financing of housing against an unpredictable economic backdrop requires innovative approaches to structures of financing. Our specialists have extensive experience in utilising a variety of financial instruments to meet the requirements of the company – public debt issues, financial lease-back, exim financing, etc.;

Equal rights of lenders: LenSpetsSMU aims to ensure equal rights for lenders and investors in relation to the borrower, including seeking to establish similar terms in loan agreements in absence of collateral, the implementation of the pari passu principal, etc.;

Transparency: lenders and investors should be entitled to equal access to all financial information. Etalon Group adheres to legal requirements on information disclosure and the best practices in voluntary disclosure. The primary source for such information is a dedicated financial site established in 2004, containing financial statements (RAS since 2000, IFRS since 2003), credit history, S&P reports, KPIs, investors’ calendar, news, information about the Group, etc.