ACRA ASSIGNS AA-(RU) TO THE SERIES 002P-06 (RU000A10DPW4) AND SERIES 002P-07 (RU000A10DPV6) BOND ISSUES OF SISTEMA PJSFC

Credit rating rationale. The series 002P-06 and 002P-07 bond issues represent senior unsecured debt of Sistema PJSFC (hereinafter, Sistema or the Holding). Due to the absence of either structural or contractual subordination of the issues, ACRA regards them as equal to other existing and future unsecured and unsubordinated debt obligations of the Holding in terms of priority. As per ACRA’s methodology, the simplified approach was used to determine the credit rating, according to which the recovery rate for issues corresponds to category II, in connection with which the credit rating of the issues is equal to the credit rating of the Holding: AA-(RU).

The credit rating of Sistema PJSFC is based on the continued high quality of the Holding’s financial investments coupled with their sustainable structure and high diversification. ACRA continues to very highly assess the Holding’s corporate governance, which is characterized by a conservative financial policy and a consistent, predictable investment policy.

The Agency continues to assess Sistema’s financial risk profile as above medium. In ACRA’s opinion, the Holding is characterized by medium leverage and very strong liquidity. The rating is still constrained by the low coverage of interest payments.

Sistema is one of Russia’s largest investment holdings. Its shareholdings are spread across a wide range of industries. 32.6% of the Holding’s shares are in free float.

KEY ISSUE PROPERTIES

1) ISIN RU000A10DPW4

2) ISIN RU000A10DPV6

Sources: ACRA, issuer’s data

REGULATORY DISCLOSURE

The credit ratings have been assigned to the issues of SISTEMA PJSFC based on the following methodologies: the Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation to determine the credit ratings of the bond issue 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 to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.

The credit ratings of the issues (ISIN RU000A10DPW4, ISIN RU000A10DPV6) assigned under the national scale for the Russian Federation have been published for the first time.

The credit ratings are expected to be revised within one year.

The credit ratings were assigned based on data provided by SISTEMA PJSFC, information from publicly available sources, and ACRA’s own databases.

The credit ratings are solicited and SISTEMA PJSFC 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 no additional services to SISTEMA PJSFC during the year preceding the rating action.

No conflicts of interest were discovered in the course of credit rating assignment.