Standard & Poor's noted successful deal of LenSpetsSMU on changing CLN parameters and verified the company’s rating (press release of the company)

26.03.2009

On March 26, 2009 rating agency Standard & Poor’s published the annual rating report for CJSC SSMO “LenSpetsSMU”. Once again the rating as per international scale was affirmed at ‘B’ level, the outlook – «Stable» and the rating as per national scale was affirmed at ‘ruA’ level. A successful deal on changing the credit-linked note (CLN) parameters was mentioned individually in the report.

In Standard & Poor’s opinion, the basic factors having significant influence upon the Company’s rating remain, mainly, the macroeconomic phenomena, such as, certain recession in the real estate market caused by overall crisis effects, uncertainty of political and economical situation in the country, lack of administrative transparency and predictability and sectoral risks. The negative factors also covered limited business diversity of LenSpetsSMU and its weak liquid position. The rating company evaluates the Company’s liquidity based on its internal rating criteria. According to this procedure, in the nearest future the Company’s liquidity level will be substantially determined by its access to the external sources of the debt financing, which can turn out to be a problem under current conditions. At the same time the rating agency analysts note that the process of changing the credit-linked note parameters completed beforehand in early March 2009 appeases and evens the servicing and financial debt repayment schedule.

The risks specified are moderated by the leading position of the holding Company in the basic market (Saint-Petersburg and the surrounding region), settled business reputation and popular trademark. LenSpetsSMU controls all stages of project implementation, which allows for the Company to provide efficient work quality control and expense management. In addition to it, the report notes the Company’s management adherence to the weighed policy of development and finance control under macroeconomic crisis conditions.

The report made by Standard & Poor’s indicates particularly that LenSpetsSMU can probably sustain quite strict limitations specified in the Company’s financial policy (particularly, the debt/EBITDA ratio at level of 3.5 or lower), based on results of 2008 due to financial discipline and careful approach to the Company’s development.

Full version of Standard & Poor’s report is available at the financial web-site of LenSpetsSMU.

REFERENCE:

Current rating CJSC SSMO «LenSpetsSMU»: B/Stable/B; ruA.

LenSpetsSMU became the first and remain one of two Russian construction companies, which obtained and published their credit ratings assigned by the largest and most conservative international rating agency – Standard & Poor’s. At the same time, LenSpetsSMU is currently the most high-rated construction company in Russia and Eastern Europe.

Rating ‘B’ as per international scale reflects available possibility to discharge the obligations in due time and in the full scope.

Rating ‘ruA’ as per national scale testifies the fact, that the company is characterized by moderately high ability to discharge their debenture bonds relative to other Russian issuers in due time and in the full scope.

CORPORATE CREDIT RATINGS HISTORY:

22.12.2006

The rating as per international scale - ‘B’, outlook – stable, the rating as per national scale – ‘ruA-’ were assigned.

The rating for ruble-denominated bonds of CDR (01 and 02 series), where CJSC SSMO “LenSpetsSMU” acted as a guarantor – rating as per national scale ‘ruA-’ was also assigned.

21.03.2007

The ratings as per international scale (‘B’, outlook – stable) and national scale (‘ruA-’) were affirmed.

17.04.2007

The rating for debenture bond (CLN) as per international scale ‘B’ was assigned.

12.12.2007

The outlook as per international scale was revised from «stable» to «positive».

The rating as per national scale was increased from ‘ruA-’ up to ‘ruA’.

The rating of bonded debts of 01 and 02 series was also increased from ‘ruA-’ up to ‘ruA’.

04.04.2008

The ratings as per international and national scales were affirmed.

07.10.2008

The outlook as per international scale was revised from «positive» to «stable» because of financial crisis and overall economy condition deterioration.

The rating as per national scale was left without alternations.

30.01.2009

In spite of the process of changing the credit-linked note (CLN) parameters, the ratings as per international and national scales were affirmed.

26.03.2009

The ratings as per international and national scales were affirmed.

CONTACT DETAILS:

Mikhail Dukhovny, Director of the Department for Corporate Communication

tel. (812) 348-21-25, e-mail: dukhovny_m@lenspecsmu.ru

Viktor Vasenev, Deputy CFO

tel. (812) 348-09-95, e-mail: vasenev_v@lenspecsmu.ru