Credit rating rationale. The bond represents senior unsecured debt of “Element Leasing” LLC (hereinafter, Element Leasing, or the Company). Due to the absence of either structural or contractual subordination of the bond, ACRA ranks the bond pari passu with other existing and future unsecured and unsubordinated debt obligations of the Company. According to the ACRA methodology, the reimbursement rate for unsecured debt corresponds to category II; hence, the bond issue is assigned the credit rating BBB+(RU), on par with the credit rating assigned to Element Leasing.

The credit rating of Element Leasing is based on 'adequate' assessments of business profile and capital adequacy, 'strong' risk profile and 'satisfactory' assessment of funding and liquidity. The Company's creditworthiness is 'moderately high' as compared to Russian peers.

Key issue properties

Borrower

Element Leasing LLC

Issuer’s credit rating

BBB+(RU), outlook Stable

Actual issuer

Element Leasing LLC

Type of security

Exchange-traded interest-bearing certified unregistered bond, 001P-01 series

Issue volume

RUB 5 bln

ISIN

RU000A0ZZ0L6

Final placement date

March 30, 2018

Maturity date

March 26, 2021

Regulatory disclosure

The credit rating has been assigned under the national scale for the Russian Federation and is based on the Methodology for Assigning Credit Ratings to Individual Issues of Financial Instruments under the National Scale of 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 001P-01 series bond issued by “Element Leasing” LLC for the first time. The credit rating is expected to be revised within one year following the rating action date (April 13, 2018).

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

No material discrepancies between the provided data and the data officially disclosed by "Element Leasing" LLC in its financial statements have been discovered.

ACRA provided no additional services to "Element Leasing" LLC. No conflicts of interest were discovered in the course of credit rating assignment.

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