Standard & Poor’s reaffirm LenSpetsSMU rating

13.01.2012

On 10 January, 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 centered around the regulatory risks of the construction sector, the cyclical nature of demand and prices on the real estate market, as well as a long operating cycle and exposure to volatility through the cost of building materials and labor.

The following factors were deemed to be positive: LenSpetsSMU’s leading position in the real estate market in St. Petersburg and its region, the company’s relatively large size against its peers, its breadth of experience in construction project implementation, effective risk management in administrative and legal areas, and high profitability.

Despite the high level of liquidity at the end of the year (about 5 billion rubles on LenSpetsSMU Group) Standard &Poor’s assessed the liquidity position of the company as “less than adequate” when judged by S&P’s formal criteria. The ratings agency has taken into account the increased level of liquidity in the wake of 2011’s IPO, but at the same time pointed to the extensive investment in acquisition and financing of new projects as putting pressure on liquidity. However, according to the report, the liquidity level may return to an “adequate” level in 2013.

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 LPNs and ruble bonds of 01 series and БО-02 series were also reaffirmed.

The Standard & Poor’s report is available in full on LenSpetsSMU’s financial web-site.

REFERENCE:

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

LenSpetsSMU was the first and remains the only Russian construction company to receive and publish credit ratings from Standard & Poor's, the largest and most stringent international rating agency.

The ‘B’ international scale rating shows that the company has the capacity to meet its financial commitments on obligations in full and on time.

The ‘ruA’ national scale rating indicates that the company is characterised by a moderately strong capacity to meet its financial commitments on obligations in full and on time, as 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 the international scale (‘B’, outlook – stable) and national scale (‘ruA-’) were affirmed.

17.04.2007

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

12.12.2007

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

The rating as per national scale was increased from ‘ruA-’ 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 the international and national scales were affirmed.

07.10.2008

The outlook as per international scale was revised from «positive» to «stable» due to the financial crisis and wider deterioration of the economy.

The rating as per the national scale was unaltered.

30.01.2009

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

26.03.2009

The ratings as per the 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 the international and national scales were affirmed.

10.06.2011

The rating for obligations (LPN) as per the international scale ‘B’ was assigned.

10.01.2012

The ratings as per the international and national scales were affirmed.


CONTACT DETAILS:

Elena Kazakova, Head of Public Relations

tel. (812) 348-21-25, e-mail: Elena.Kazakova@etalongroup.com

Viktor Vasenev,Ag. CFO

tel. (812) 348-09-95, e-mail: Viktor.Vasenev@etalongroup.com