Standard & Poor's publishes its brief rationale for its LenSpetsSMU credit rating

04.02.2013

On 30 January 2013, the international rating agency Standard & Poor’s published its brief rational for the credit rating it assigned to CJSC SSMO LenSpetsSMU (B/Positive/B).

According to Standard & Poor’s criteria, CJSC SSMO LenSpetsSMU’s liquidity position is assessed as “adequate.”

According to the rating agency, the company’s liquidity profile received a significant boost in connection with the placement on 18 December 2012 of 02 series CJSC SSMO LenSpetsSMU bonds with a par value of RUB 5 bln and a circulation period of 5 years.

In the opinion of Standard & Poor’s, a dampening influence on the evaluation of CJSC SSMO LenSpetsSMU’s business-risk profile continues to be exerted by sectoral risks, which include increased volatility and long operating cycle, and country risk, predicated on the insufficient transparency and predictability of administrative procedures in Russia. Yet, the negative impact of these factors, as stressed in the report, is largely nullified by the lead positions that LenSpetsSMU enjoys on the St. Petersburg real estate market.

The Standard & Poor’s report also notes that satisfaction of at least one of the following conditions – improvement in either CJSC SSMO LenSpetsSMU’s capital structure or operating performance indicators over the next 6 months – would serve as grounds for a higher rating.

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 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.

CONTACT DETAILS:

Kseniya Savchuk

Acting head of Public Relations

+7 (812) 348-21-25

Kseniya.Savchuk@etalongroup.com

Yana Yashchenko

Deputy CFO

+7 (812) 348-09-95

Yana.Yashchenko@etalongroup.com