ACRA ASSIGNS A(RU) TO SERIES 001Р-04 (RU000A106540) BOND ISSUED BY LLC "MV FINANCE"

Credit rating rationale. LLC "MVM" (hereinafter, MVM, or the Company; ACRA rating A(RU), outlook Stable) acts as the guarantor for this bond issue of LLC "MV FINANCE". The issue is a senior unsecured debt instrument of the Company. In view of 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 debt obligations of the Company. In assigning an issue credit rating, ACRA applied a detailed approach to calculate recovery rates. According to ACRA’s methodology, the recovery rate on unsecured debt belongs to category II, so that the issue credit rating is on par with that of the Company — A(RU).

The credit rating of the Company is based on the very strong support from PJSC “M.Video” (hereinafter, M.Video–Eldorado Group, or the Group), and the high dependence of MVM and the M.Video–Eldorado Group on the same risk factors. ACRA notes that the Group recorded an increase in leverage and a decrease in coverage of interest payments and fixed charges in 2022. On the back of sanctions, the Group was forced to rapidly rebuild its supply chains and replenish its working capital used to purchase goods in foreign countries.

Key issue properties

Sources: ACRA, issuer’s data

regulatory disclosure

The credit rating has been assigned to the 001Р-04 series (RU000A106540) bond issued by LLC "MV FINANCE" under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Financial Instruments on 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.

A credit rating has been assigned to the 001Р-04 series (RU000A106540) bond issued by LLC "MV FINANCE" for the first time. The credit rating is expected to be revised within one year following the publication date of this press release.

The credit rating was assigned based on data provided by LLC "MVM", information from publicly available sources, and ACRA’s own databases. The credit rating is solicited, and LLC "MVM" participated in its assignment.

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

ACRA provided no additional services to LLC "MV FINANCE" and LLC "MVM". No conflicts of interest were discovered in the course of credit rating assignment.