Expected credit rating rationale. The issue is a senior unsecured debt instrument of the State Company Russian Highways (hereinafter, the Company). 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. According to ACRA’s methodology, the credit rating of the issue is on par with that of the Company, i.e. AA(RU), therefore the expected rating is eAA(RU).
The credit rating is based on the state’s very strong influence over the Company. The state exercises absolute operational and financial control over the Company and subsidizes its activities in asset management and road construction/reconstruction. ACRA assesses the Company’s systemic importance as high. However, the Company’s systemic importance does not reach the maximum level because toll roads are not critical for Russia’s transport infrastructure (toll-free alternatives are available).
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 unregistered bond, |
| Issue volume | RUB 27,280,200,000 |
| RegS | 4B02-05-00011-T-002P |
| Placement start date | December 25, 2019 |
| Maturity date | December 12, 2029 |
| Call option date | December 21, 2022 |
Regulatory Disclosure
ACRA will assign a credit rating to BО-002P-05 series bond issued by the State Company Russian Highways after the final documentation is presented. In the case of any significant discrepancies between the final documentation and the preliminary materials, ACRA may change the issue credit rating against the expected credit rating.
The expected credit rating has been assigned to BО-002P-05 series bond issued by State Company Russian Highways 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 the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The expected credit rating has been assigned to BО-002P-05 series bond issued by State Company Russian Highways for the first time. ACRA expects to assign the final credit rating within 90 days following the publication date of this press release.
The expected credit rating is based on data provided by the State Company Russian Highways, information from publicly available sources, and ACRA’s own databases. The expected 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 the expected credit rating assignment.
