Standard & Poor’s reaffirms LenSpetsSMU rating

23.11.2010

On 19 November, the rating agency Standard & Poor’s published its regular report reaffirming CJSC SSMO LenSpetsSMU’s rating as ‘B’ level according to the international scale and ‘ruA’ level according to the national scale, outlook – ‘Stable’.

The main factors influencing the company’s rating, according to Standard & Poor’s, continue to be mainly macroeconomic, and include: exposure to risks relating to the construction sector and national stability, the cyclical nature of the real estate market, as well as insufficient transparency and the unpredictable nature of the administrative environment. LenSpetsSMU’s dependence on St. Petersburg’s regional market, in which the company operates as a developer, was also considered as a negative factor.

The following factors were deemed as positive: LenSpetsSMU’s leading position in the real estate market in St. Petersburg and its region, which only strengthened during the 2008-2009 crisis, the company’s strengths vast experience in construction project implementation, effective risk management in administrative and legal areas, and high profitability.

In the report characterizes the company’s liquidity position as ‘adequate’ in the light of the new Eurobond issue. Moreover, S&P’s analysts commended LenSpetsSMU’s conservative approach to managing their liquidity position and improving the credit portfolio structure in terms of duration and repayment schedules.

At the same time, a ‘B’ rating according to the international scale and ‘4’ rating of the expected level of debt redemption for CJSC SSMO LenSpetsSMU bonds of 01 series and БО-02 series were also reaffirmed.

The confirmation of the rating is a positive signal to investors who participated in new $150 mil Eurobond issue placement and are planning to join trading on the secondary market.

A complete version of Standard & Poor’s report is available on LenSpetsSMU’s financial web-site.

REFERENCE:

The current rating of CJSC SSMO LenSpetsSMU: B / Stable / B; ruA.

LenSpetsSMU is the first and only Russian construction company to receive and publish credit ratings from Standard & Poor's, the largest and most stringent international rating agency. At the same time, LenSpetsSMU continues to hold its position as the most highly-rated construction company in Russia and Eastern Europe.

The `B' international scale rating demonstrates that the company has the capacity to meet its financial commitments on obligations in full and in due time.

The ‘ruA’ national scale rating shows that the company is characterized by a moderately strong capacity to meet its financial commitments on obligations in full and in due time, compared to other Russian issuers.

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, 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 obligations (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 ruble bonds 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 the financial crisis and overall deterioration of the economy.

The rating as per national scale was unaltered.

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.

01.09.2009

Following the fulfillment of the major part of debt obligations being subject to redemption in 2009, the international and national scale ratings were affirmed.

11.12.2009

The ratings as per international and national scales were affirmed.

24.05.2010

The rating for obligations (stock-exchange bond issue of БО-02 series) as per the international scale ‘B’ was assigned.

11.06.2010

The ratings as per international and national scales were affirmed.

19.11.2010

The ratings as per international and national scales were affirmed.

CONTACT DETAILS:

Natalia Menzel, Head of Public Relations

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

Viktor Vasenev, Deputy CFO

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