The credit rating of “Proyekt-Grad” LLC (hereinafter, the Company) is based on the very high degree of support from “A101” LLC (hereinafter, A101, the Supporting Entity, or the SE; ACRA rating A(RU), outlook Stable), as well as the high dependence of the Company and A101 on homogeneous risk factors.
The Company is one of the main holders of the land bank of A101 Group, the parent company of which is A101. Taking into account the degree of support for the Company from the Supporting Entity, ACRA considers it appropriate to use, as part of the Company’s rating analysis, only the Methodology for Analyzing Rated Entities Associated with a State or Group, without determining the Company’s standalone creditworthiness assessment (SCA).
KEY ASSESSMENT FACTORS
A101’s very high degree of support for the Company is driven by high ratings of such factors as propensity to provide support, serious consequences for A101 in the event of the Company’s default, and complete legal and operational control over the Company. The Supporting Entity’s share is 100% in the authorized capital of the Company (the key holder of A101’s land bank), which suggests full operational integration and strategic importance of the Company for the SE.
Credit rating of the Supporting Entity. The SE is A101, one of the largest residential real estate developers in the Moscow area, and is engaged in construction and sales of residential real estate, primarily in the comfort and comfort plus segments, and also carries out a number of business class projects as part of the comprehensive development of New Moscow. According to the Unified Resource of Developers, A101’s construction portfolio amounted to 1.33 mln sq. m as of November 2023. A101’s credit rating is based on the strong assessment of the operational risk profile, low leverage, very high debt service indicator, very high profitability, and strong liquidity. The rating is constrained by the very high industry risk (residential construction), as well as the medium assessment of business size.
KEY ASSUMPTIONS
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A101 maintaining shareholder and operational control;
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The Company maintaining its status as the key holder of A101’s land bank.
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:
- Upgrade of A101’s credit rating.
A negative rating action may be prompted by:
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Downgrade of A101’s credit rating.
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Loss of shareholder and operational control by the Supporting Entity;
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The Company losing its status as the main holder of the SE’s land bank.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): none.
Support: on a par with А101.
ISSUE RATINGS
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to “Proyekt-Grad” LLC 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.
A credit rating has been assigned to “Proyekt-Grad” LLC for the first time. The credit rating and its outlook are 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 “Proyekt-Grad” LLC, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and “Proyekt-Grad” LLC 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 “Proyekt-Grad” LLC. No conflicts of interest were discovered in the course of credit rating assignment.
