The credit rating of Soyuzdorstroy JSC (hereinafter, AVTOBAN GC, or the Company) has been affirmed because credit metrics have been maintained within the ranges established for this rating level. The outlook has been changed from Stable to Positive due to the falling leverage indicators (ratio of total debt to FFO before interest and taxes and ratio of total debt to equity). The continuation of this trend in 2021 and 2022 will contribute to an increase in the weighted assessments of these indicators, which may serve as the basis for revising the Company’s credit rating.

The current rating is based on the Company’s strong business profile and stable market positions driven by the Company’s increased engagement in a number of large-scale private-public partnership (PPP) projects, including concessions. The conservative financial policy ensures low leverage and good liquidity. The rating is limited by the low free cash flow (FCF). In addition, the infrastructure construction industry is exposed to high risks, which also limits the Company’s rating. However, ACRA notes that road construction is the least risky segment in the industry.

AVTOBAN GC is one of the three largest road construction companies in Russia, with revenues of RUB 85.5 bln and a market share of over 9% in 2020. The Company is the leader in PPP projects in transportation infrastructure (RUB 201 bln). In 2018–2019, the Company commissioned 263 km of roads, and the total amount of committed contracts for 2021–2024 is around RUB 400 bln. About 98% of the Company’s revenues come from government contracts. A. V. Andreyev owns 100% of the Company’s shares.

key assessment factors

The strong business profile assessment takes into account the fact that construction of road facilities, which AVTOBAN GC’s activities are focused on, is characterized by minimal complexity in the context of the infrastructure construction industry. Therefore, the Complexity and Construction Experience sub-factor received the maximum score. The Agency notes that AVTOBAN GC has accumulated significant expertise and its contract portfolio covers 100% of its output capacity until 2024, which is the reason for the high assessment score for the Contract Base Quality sub-factor. At the same time, ACRA notes the presence of large customer concentration risk — State Company “Russian Highways” accounted for 82% of 2020 revenues. The Company loses some of its revenues due to subcontracting (34% of 2020 revenues). AVTOBAN GC has a wide geographic reach covering 15 regions in four federal districts of the Russian Federation.

The average corporate governance assessment reflects the average assessment (for the Russian corporate sector) of such sub-factors as Management Strategy and Risk Management, for which the Company has approved procedures and determined bodies responsible for making decisions and their implementation. In assessing the Management Structure sub-factor, ACRA took into account the concentration of equity capital in the hands of the sole shareholder, as well as the fact that he takes part in the Company’s operations. However, the Company has a board of directors that makes strategic decisions. The average assessment of Group Structure takes into account the presence of a large number of legal entities in the structure of AVTOBAN GC. At the same time, ACRA notes the absence of intra-group cash flows between concession companies and other companies of AVTOBAN GC. The average assessment of financial transparency takes into account the fact that the Company discloses 6- and 12-month consolidated IFRS financial statements audited by KPMG, quarterly reports, and information about significant events.

The financial risk profile assessment is based on the average size of business (the absolute value of FFO before net interest payments and taxes stands at less than RUB 30 bln), high profitability, low leverage, and the average debt service indicator. Very low FCF constrains the rating. The Company participates in concession agreements. The debt raised under concession agreements has no recourse to AVTOBAN GC; the principal shareholder is a surety under the junior debt. Therefore, ACRA regards the concession-related debt of concessionary companies that are part of AVTOBAN GC as segregated from the Company, as concession loans are required by law to be fully repaid in case of any changes in the concession terms and conditions regardless of the concessioner’s fault. In 2020, the ratio of total debt (excluding liabilities under concession agreements) to FFO before net interest payments declined to 0.7x vs. 2.0x in 2019 amid a decline in the absolute value of debt and higher operating cash flow. ACRA expects this indicator to amount to 1.0x for 2021. Maintaining the indicator at the aforementioned level may be grounds to revise the Company’s credit rating.

Very weak cash flow and high short-term liquidity. The Company’s FCF was negative from 2017 to 2020, mainly due to growth of the business and the need to make significant investments in working capital. ACRA expects FCF to still be negative as of the end of 2021. The Agency assesses the Company’s liquidity as high, even taking into account the limited use of cash under concession projects. Liquidity is supported mostly by undrawn credit facilities. The qualitative liquidity assessment is high.


  • Revenues and prime costs to grow in 2021–2023, and the investment program to be implemented in line with the Company’s business plan;

  • No significant annual dividend payments in the forecast period.


The Positive outlook assumes that the rating will most likely change within the 12 to 18-month horizon.

A positive rating action may be prompted by:

  • Ratio of total debt to FFO before net interest payments lower than 1.0x;

  • Ratio of FFO before net interest payments to interest payments exceeding 5.0x.

A negative rating action may be prompted by:

  • Debt coverage declining below 2.5x and the short-term liquidity ratio and FFO margin before interest payments and taxes falling below 1.0x and 12%, respectively.


Standalone creditworthiness assessment (SCA): a-.

Support: none.


Certificated commercial bond series KO-01 (RU000A100UQ8) issued by AVTOBAN-Finance JSC, maturity date: September 16, 2022, issue volume: RUB 5 bln — А-(RU).

Certificated exchange-traded interest-bearing bond series BO-P02 (RU000A100733) issued by AVTOBAN-Finance JSC, maturity date: March 19, 2024, issue volume: RUB 3 bln — А-(RU).

Rationale. The abovementioned bond issues of AVTOBAN-Finance JSC, a member company of AVTOBAN GC, represent senior unsecured debt of AVTOBAN-Finance JSC according to ACRA’s methodology, which is secured by call options and sureties of the operating companies of AVTOBAN GC, including DSK AVTOBAN JSC, Khanty-Mansiyskdorstroy OJSC, and Soyuzdorstroy JSC. The rating was assigned based on the issue documentation, according to which the guarantors are jointly liable to the bondholders for the issuer’s failure to perform and/or improper performance of its obligations.

Due to the absence of either structural or contractual subordination of the issues, ACRA regards it as pari passu with other existing and future unsecured and unsubordinated obligations of the Company.

In accordance with ACRA’s methodology and in view of the Company’s high creditworthiness and low leverage, the credit rating of the issues is on par with that of the Company, i.e. A-(RU).


The credit ratings have been assigned under the national scale for the Russian Federation based on the Methodology for Credit Ratings Assignment to Non-Financial Corporations under the National Scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities. The Methodology for Assigning Credit Ratings to Individual Issues of Financial Instruments on the National Scale for the Russian Federation was also applied to assign a credit rating to the above issues.

The credit rating assigned to Soyuzdorstroy JSC and the credit rating assigned to the bonds issued by AVTOBAN-Finance JSC (ISIN RU000A100733, RU000A100UQ8) were published by ACRA for the first time on December 29, 2017 and December 20, 2019, respectively. The credit rating and its outlook and the credit rating of the bonds issued by AVTOBAN-Finance JSC (ISIN RU000A100733, RU000A100UQ8) are expected to be revised within one year following the publication date of this press release.

The credit ratings were assigned based on data provided by Soyuzdorstroy JSC, information from publicly available sources, and ACRA’s own databases. The credit ratings were assigned based on the consolidated IFRS financial statements of Soyuzdorstroy JSC. The credit ratings are solicited, and Soyuzdorstroy JSC participated in their assignment.

In assigning the credit ratings, ACRA used only information, the quality and reliability of which was, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.

ACRA provided no additional services to Soyuzdorstroy JSC. ACRA provided additional services to AVTOBAN-Finance JSC. No conflicts of interest were discovered in the course of credit rating assignment.

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