ACRA ASSIGNS BBB(RU) TO THE SERIES 001P-04 BOND (RU000A1065B1) ISSUE OF JSC ASPHALTOBETONNY ZAVOD N1

Credit rating rationale. The issue is senior unsecured debt of JSC Asphaltobetonny Zavod N1 (hereinafter, the Issuer), an operating subsidiary of AO PSF “BALTIYSKIY PROEKT” (BBB(RU), outlook Stable, the parent company of ABZ-1 Group, hereinafter, BALTIYSKIY PROEKT, or the Group). The rating has been assigned on the basis of public irrevocable offers from the Group and ABZ-Dorstroy JSC, one of the Group’s operating companies. Due to the absence of either structural or contractual subordination of the issue, ACRA regards it as equal to other existing and future unsecured and unsubordinated debt obligations of the Group in terms of priority. In accordance with ACRA’s methodology, the Agency has applied the detailed approach. According to ACRA’s calculations, the recovery rate for the senior unsecured debt belongs to category I, therefore, the issue credit rating is equivalent to the Group’s credit rating, i.e. BBB(RU).

The Group’s credit rating is based on medium assessments of its business profile, market position, corporate governance, and geographic diversification. The Group’s financial profile includes a high FFO before net interest payments and taxes margin, medium interest payment coverage, and medium indicators of leverage, liquidity, and free cash flow (FCF) margin.

The rating is constrained by the low assessment of the business size (as per ACRA’s methodology) and the level of industry risks associated with the infrastructure construction segment. However, the Agency notes that the nature of the Group’s core business (road construction) is among the least complex businesses in the industry, which partially mitigates the risks. As the Group is carrying out a major PPP project related to tramway network construction, and budget and bank financing was opened in late 2022, the risk of BALTIYSKIY PROEKT’s operating business profile has been partially adjusted due to the lack of experience in implementing such concession agreements.

KEY ISSUE PROPERTIES

Sources: ACRA, issuer’s data

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 Financial Instruments 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.

A credit rating has been assigned to the series 001Р-04 bond issue (RU000A1065B1) of JSC Asphaltobetonny Zavod N1 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 AO PSF “BALTIYSKIY PROEKT”, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and AO PSF “BALTIYSKIY PROEKT” 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 AO PSF “BALTIYSKIY PROEKT” and JSC Asphaltobetonny Zavod N1. No conflicts of interest were discovered in the course of credit rating assignment.