The credit rating of "Gazprombank-Invest" Llc. (hereinafter, the Company) is based on the high likelihood of extraordinary support from Bank GPB (JSC) (hereinafter, the Bank, the Supporting Entity), whose creditworthiness is high (AA+(RU), outlook Stable), the Company's sustainable positions in the residential construction market, and a range of large and successful projects.
The Company is a wholly owned subsidiary of the Bank and its sole purpose is to invest in various development projects. The Company is funded exclusively by the Supporting Entity, in the form of equity and loans.
Since all investment and financial decisions are made by the Supporting Entity, ACRA is of the opinion that assessing the Company’s standalone creditworthiness is impractical and, therefore, applies solely the Methodology for Analyzing Rated Entities Associated with a State or a Group.
Key assessment factors
The likelihood of support to the Company from the Supporting Entity is high. All of the Company’s investment decisions are made by the Board of Directors, which includes top executives of the Supporting Entity. Before a project is submitted to the Company’s Board of Directors, it is approved by all relevant divisions of the Bank.
The Company develops its business by reinvesting its own capital and borrowed funds. The Company’s only source of credit is the Bank. The Company selects potential projects based on historical benchmarks, in particular the Company’s participation, payback period, and project profitability. However, the Company’s Board of Directors makes decisions on the capital structure and terms of participation for each project only after approval is received from the relevant divisions of the Bank. The Bank also determines the Company’s dividend policy.
The Bank determines all of the Company’s key strategic decisions and therefore provides comprehensive support to the Company and other companies of its group. In addition, the Bank provides the Company with debt financing in the form of credit lines in order to implement projects. If necessary, the Bank is ready to provide extraordinary support to the Company, both in the form of capital and liquidity. ACRA assesses the likelihood of such support as high.
- The Supporting Entity maintaining its shareholder and operational control over the Company.
Potential outlook or rating change factors
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
- Increased importance of the Company for the Bank.
A negative rating action may be prompted by:
- The Bank's loss of shareholder or operational control over the Company.
Standalone creditworthiness assessment (SCA): not determined.
Support: -5 notches of the Bank's credit rating.
No outstanding issues have been rated.
The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Analyzing Rated Entities Associated with a State or a Group and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of "Gazprombank-Invest" Llc. was published by ACRA for the first time on October 10, 2019. The credit rating of "Gazprombank-Invest" Llc. and its outlook are expected to be revised within one year following the publication date of this press release.
Disclosure of deviations from the approved methodologies: the final credit rating is determined with a deviation from the Methodology for Analyzing Rated Entities Associated with a State or a Group. In the Agency's opinion, the Bank's systemic importance taken into account in the credit rating is not a factor affecting the creditworthiness of the Company in terms of support. Therefore, the Bank's SCA is used instead of SECA.
The credit rating was assigned based on the data provided by "Gazprombank-Invest" Llc., information from publicly available sources and ACRA’s own databases. The credit rating is solicited, and "Gazprombank-Invest" Llc. participated in its assignment.
In assigning the credit rating, 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 "Gazprombank-Invest" Llc. No
conflicts of interest were discovered in the course of credit rating assignment.