The credit rating of “Rosagroleasing” Company (hereinafter, Rosagroleasing or the Company) is based on the high likelihood of extraordinary support being provided to the Company by the supporting entity (hereinafter, the Supporting Entity or the SE), and stable standalone creditworthiness, taking into account the functional significance of the Company for the agricultural sector of the Russian economy. The Company’s standalone creditworthiness assessment (SCA) has been upgraded due to the continued growth of the scale of business, which, among other things, is reflected in the creation of a branch network, and a larger number of suppliers and clients amid the growth of the Company’s portfolio that continues to be high quality. ACRA also notes the increasing diversification of Rosagroleasing’s activities in the segment of the country’s agro-industrial complex (AIC).
The Company was founded in 2001. Its operations are focused on modernizing the material and technical base of enterprises of the AIC of Russia, including via state subsidy programs. Rosagroleasing provides financial leasing services throughout Russia via agent dealers. In order to develop commercial leasing, in 2024 the Company created its own branch network, which currently has 10 branches. Rosagroleasing has been the leader in terms of the volume of agricultural machinery leased in the country and one of the largest Russian leasing companies in terms of lease portfolio size for many years.
key assessment factors
High likelihood of extraordinary support from the SE. If necessary, the Supporting Entity can carry out capital injections and provide financing sufficient to support the Company’s liquidity. ACRA’s very high assessment of the extent of support takes into account the following:
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Rosagroleasing is one of the key agents via which programs to develop and support the AIC are carried out;
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Rosagroleasing is a systemically important organization of the Russian economy, and also a systemically important organization of the AIC;
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Complete shareholder and organizational control over the Company exercised by the SE; a board of directors has been created at Rosagroleasing, including by representatives of the Supporting Entity;
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The Company regularly receives the SE’s support in the form of capital injections and subsidies. This support for the Company is stipulated, among other things, by a specially issued regulation.
The shareholding structure of the Company determines the high probability of reputational risks for the SE in the event of the Company’s default. The risks of financial losses in the event that Rosagroleasing is unable to independently fulfill its obligations are assessed as moderate, taking into account the absolute scale of activities and the high share of equity capital in the Company’s liabilities. Given the Company’s structure of revenues and funding, ACRA assesses the degree of dependence of Rosagroleasing and the SE on homogeneous risk factors as high.
ACRA’s opinion on the overall level of support for the Company from the SE is expressed in setting its final rating on a par with the Russian Federation minus three notches.
The adequate business profile stems from the well-known brand of Rosagroleasing, strong competitive advantages, and extensive work experience in the AIC. Government subsidy mechanisms contribute to the sustainability of the revenue base and have a positive impact on the Company’s financial results. ACRA notes the strengthening of the Company’s market positions, including due to the specifics of its activities and its functional role.
The size of the Company’s internal funds, according to ACRA’s estimates, is very high and as of September 30, 2024 amounted to around RUB 107 bln.
The main share of the Company’s lease portfolio is agricultural machinery (around 77% of the portfolio). In addition, ACRA notes the diversification of the portfolio, which reflects the expansion of government subsidies to cover needs for equipment and machinery of processing and food industry enterprises. Vehicles account for 11% of the portfolio, while railroad equipment accounts for 5%.
The quality of corporate governance and risk management of Rosagroleasing corresponds to the main risks of its activities. The Company has a multi-level risk management system and detailed regulation of risk management procedures. Rosagroleasing pays significant attention to the introduction of robotization and digitalization in its activities and, among other things, works in various areas of the Company’s digital transformation. In 2024, Rosagroleasing completed its five-year strategy cycle by achieving its targets ahead of schedule. A strategy has been developed for 2025–2030 that reflects the further comprehensive development of the Company. The strategy will be published after all of its stages are approved.
Adequate capital adequacy assessment. ACRA notes that the Company has retained a significant reserve of capital amid a moderate ability to generate capital. Rosagroleasing’s capital adequacy ratio (CAR) remains high at 43% as of October 1, 2024. The Company demonstrates fast growth of the lease portfolio (as of October 1, 2024, it had grown by 1.5 times year-on-year). Portfolio growth is reflected in a decrease in the CAR, however, like in past periods, the Agency does not expect a significant deterioration in the ratio over the 12 to 18-month horizon thanks to regular additional capitalization provided by the SE.
The averaged capital generation ratio (ACGR) over the past five years has grown since last year and amounted to 183 bps.
Adequate risk profile assessment. As of October 1, 2024, the share of non-performing and potential non-performing assets in the Company’s current lease portfolio amounted to around 4%, however, payments overdue more than 90 days did not exceed 0.3% of the portfolio. Overall coverage of bad debts by IFRS reserves is assessed by ACRA as adequate. The Agency notes growth in the volume of repossessed problem assets in 2024 compared to 2023, but relative to the portfolio, the share of such assets remains low (just over 1%). At the same time, the share of repossessed assets on the balance sheet as of September 30, 2024 was less than 1%, which indicates the successful sale of repossessed assets.
Rosagroleasing has a broad client base, which ensures a low concentration of lessees. This concentration has declined compared to last year — as of October 1, 2024, the 10 largest clients accounted for around 16% of the portfolio (vs. 18% a year earlier), and the largest client accounted for around 2% (vs. 3.5% a year earlier).
Strong funding assessment. The funding structure stems from the dominating role of equity capital in the Company’s liabilities (43% as of October 1, 2024). In 2024, Rosagroleasing actively participated in the bond market, placing three issues during the year, which allowed it to maintain high funding diversification amid a significant increase in bank lending. As of October 1, 2024, the share of bank loans in liabilities amounted to 34%, while bond debt stood at 20% (24% and 14% a year earlier, respectively). The share of the largest bank accounts for around 10% of liabilities.
Satisfactory liquidity assessment. The Company retains a positive supply of funds as of the end of each quarter over the next 12 to 24 months (the projected ratio of current liquidity over the 24-month horizon is around 1.02). A deficit of funds is also not projected in the stress scenario. Regular contributions made to the Company’s capital by the SE are positive for the liquidity position. Furthermore, Rosagroleasing is able to obtain bank financing under open limits.
key assumptions
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The SE maintaining shareholder and operational control;
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Maintaining the current business model over the 12 to 18-month horizon.
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:
- Improved assessment of support for the Company due to growth of its importance to the SE.
A negative rating action may be prompted by:
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Loss of shareholder control by the SE or reduced importance of the Company to the SE or the SE’s reduced propensity to support the Company;
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Significant deterioration of the Company’s standalone creditworthiness.
rating components
SCA: a.
Adjustments: none.
Support: on par with the Russian Federation minus three notches.
ISSUE RATINGS
“Rosagroleasing” Company, series 001P-05 (RU000A108447), maturity date: May 2, 2029, issue volume: RUB 7 bln — AA-(RU).
“Rosagroleasing” Company, series 002P-01 (RU000A108KT6), maturity date: July 4, 2029, issue volume: RUB 7 bln — AA-(RU).
“Rosagroleasing” Company, series 002P-03 (RU000A109DT9), maturity date: September 24, 2027, issue volume: RUB 5 bln — AA-(RU).
Rationale. The issues are senior unsecured debt instruments of Rosagroleasing. Due to the absence of either structural or contractual subordination of the issues, ACRA regards them as equal other existing and future unsecured and unsubordinated debt obligations of the Company in terms of priority. As per ACRA’s methodology, the credit rating of the issues is on par with that of Rosagroleasing — AA-(RU).
regulatory disclosure
The credit ratings have been assigned to “Rosagroleasing” Company and the bond issues (ISIN RU000A108447, RU000A108KT6, RU000A109DT9) of “Rosagroleasing” Company under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Leasing Companies on the National Scale for the Russian Federation, Methodology for Assigning Credit Ratings with External Support, 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 Financial Instruments under the National Scale for the Russian Federation was also applied to assign the credit ratings to the above issues.
The credit rating of “Rosagroleasing” Company and the credit ratings of the bond issues of “Rosagroleasing” Company (ISIN RU000A108447, RU000A108KT6, RU000A109DT9) were published by ACRA for the first time on March 2, 2022, March 28, 2024, May 31, 2024, and September 3, 2024, respectively. The credit rating of “Rosagroleasing” Company and its outlook and the credit ratings of the bond issues of “Rosagroleasing” Company 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 “Rosagroleasing” Company, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the RAS and IFRS financial statements of “Rosagroleasing” Company. The credit ratings are solicited and “Rosagroleasing” Company participated in their assignment.
In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided additional services to “Rosagroleasing” Company. No conflicts of interest were discovered in the course of credit rating assignment.
