Credit rating rationale. Bond issue is a senior unsecured debt obligations of the State Company Russian Highways (hereinafter, the Company, or Avtodor). 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 obligations of the Company. The Agency expects that, in accordance with the Avtodor’s Program approved by the RF Government Decree of October 13, 2017, all principal debt and at least 50% of the coupon will be repaid from the federal budget. In accordance with the ACRA methodology, issue credit rating is on par with the credit rating of Avtodor, i.e. AA(RU).
The credit rating of Avtodor is based on the decisive state influence on Avtodor’s creditworthiness: absolute operational and financial control over the Company on the part of the state, as well as state financing of the major part of the Company’s development program. Avtodor is marked by high systemic importance for the state; however, the Agency notes that the degree of the Company’s systemic importance is not ultimate due to the limited impact of Avtodor’s potential default on the entire state economy.
Key issue properties
| Borrower | State Company Russian Highways |
| Issuer credit rating | AA(RU), outlook Stable |
| Actual issuer | State Company Russian Highways |
| Type of security | Certified exchange-traded interest-bearing non-convertible unregistered bond, |
| Issue volume | RUB 3 bln |
| ISIN | RU000A0ZZPY6 |
| Final placement date | October 19, 2018 |
| Maturity date | October 19, 2019 |
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 Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating has been assigned to RU000A0ZZPY6 bond issued by the State Company Russian Highways for the first time. The credit rating is expected to be revised within one year following the rating action date (October 18, 2018).
The assigned credit rating is based on the data provided by the State Company Russian Highways, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited, and the State Company Russian Highways participated in its assignment.
No material discrepancies between the provided information and the data officially disclosed by the State Company Russian Highways in its financial statements have been discovered.
ACRA provided no additional services to the State Company Russian Highways. No conflicts of interest were discovered in the course of credit rating assignment.
