Credit rating rationale. The issue is a senior unsecured debt instrument of the State Company Russian Highways (hereinafter, the Company, or Avtodor). Due to the absence of either structural or contractual subordination of the issue, ACRA regards it as pari passu with other existing and future unsecured and unsubordinated obligations of the Company. The Agency expects that, in accordance with Avtodor’s Program approved by the RF Government Decree dated October 13, 2017, all principal debt and up to 50% of the coupon will be repaid from the federal budget. In accordance with the ACRA methodology, the credit rating of the issue is on par with that of Avtodor, i.e. AA(RU).
The credit rating of Avtodor is based on the decisive state influence on Avtodor’s creditworthiness: the state exercises absolute operational and financial control over the Company and provides financing for the major part of the Company’s development program. Avtodor is marked by high systemic importance for the state; however, the Agency notes that the degree of the Company’s systemic importance is not ultimate due to the limited impact of Avtodor’s potential default on the country’s economy.
Key issue properties
| Borrower | State Company Russian Highways |
| Issuer’s credit rating | AA(RU), outlook Stable |
| Actual issuer | State Company Russian Highways |
| Type of security | Certified exchange-traded interest-bearing non-convertible unregistered bond, |
| Issue volume | RUB 10 bln |
| ISIN | RU000A100B40 |
| Final placement date | April 26, 2019 |
| Maturity date | April 23, 2021 |
Regulatory Disclosure
The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Individual Issues of Financial Instruments under the National Scale of the Russian Federation, and the Key Concepts Used by Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating has been assigned to RU000A100B40 bond issued by the State Company Russian Highways for the first time. The credit rating is expected to be revised within one year following the publication date of this press release.
The assigned credit rating is based on data provided by the State Company Russian Highways, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited, and the State Company Russian Highways participated in its assignment.
No material discrepancies between the provided data and data officially disclosed by the State Company Russian Highways in its financial statements have been discovered.
ACRA provided no additional services to the State Company Russian Highways. No conflicts of interest were discovered in the course of credit rating assignment.
