Standard & Poor's raise LenSpetsSMU’s credit rating outlook to ‘positive’

24.07.2012

On 24 July, Standard & Poor's raised the outlook for credit rating of CJSC SSMO LenSpetsSMU to ‘positive’ and reaffirmed its ‘B’ rating according to the international scale and ‘ruA’ level according to the national scale.

Among the factors influencing the change of outlook from Standard & Poor's were:

· LenSpetsSMU’s improved operating performance on the real estate market of St. Petersburg, showing recovery in demand and prices against a backdrop of limited supply,

· The expectation of further strengthening LenSpetsSMU’s capital structure, including the reduction of exposure to foreign currencies and the short-term debt share within the total debt structure.

At the same time, Standard & Poor's pointed out the likelihood of increasing working capital requirements in 2013 in light of upcoming construction projects. In line with Standard & Poor’s formal criteria for initial assessment, LenSpetsSMU’s liquidity position was raised to ‘adequate’. The rating agency is expecting liquidity sources to be over 1.2x that of funding requirements over the next 12 months.

At the same time, the ‘B’ rating according to the international scale, and ‘4’ rating for the anticipated level of debt redemption for CJSC SSMO LenSpetsSMU ruble bonds of 01 series, БО-02 series, LPNs 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 / Positive / B; ruA.

LenSpetsSMU is the first Russian construction company to receive and post 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 outlook revision expresses the opinion of Standard & Poor's on the possible revision of direction for the corporate credit rating in the medium term. A ‘positive’ outlook means that the corporate credit rating may be raised.

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.

CONTACT DETAILS:

Elena Kazakova

Head of Public Relations

(812) 348-21-25

Elena.Kazakova@etalongroup.com

Yana Yashchenko

Deputy CFO

(812) 349-38-40

Yana.Yashchenko@etalongroup.com