All news

ACRA Rating Agency Raised Setl Group’s Credit Rating

2019 june 13

On June 13, 2019 ACRA national credit agency raised the credit rating of the Setl Group Holding to A-(RU), forecast: Stable. Currently, this is the maximum ACRA public credit rating ever assigned to a Russian company in the Construction and Real Estate sector. ACRA also assigned the A- (RU) credit rating to the issue of Setl Group’s exchange-traded interest bearing certified bonds (RU000A0ZYEQ9).

As reported by the agency, the raising of Setl Group’s credit rating is due to favorable changes in the money flow assessment and a growing rate of return. The rating is determined by the company’s very high business profile, high rate of return of the business, very low debt load level and strong asset liquidity.

The “Stable” forecast assumes that the rating will be unchanged over the horizon period of 12-18 months with a highest probability.

The agency’s analysts believe that the very strong business profile of Setl Group is explained by high diversification of its project portfolio, stable management of deadlines and terms of their meeting, and special advantages related to the strong standing in St. Petersburg’s market of its own brokerage and consulting divisions (Petersburg Real Estate).

The high rate of return of the business is determined by the growing apartment prices under Setl Group projects due to higher demand. ACRA expects further growth of profitability in 2019-2021.

The debt load is characterized by a very low net debt and FFO ratio before net interest: as assessed by ACRA, the weighted average indicator for 2016-2021 is 0.6x.

The А- (RU) credit rating was also assigned to the issue of Setl Group’s exchange-traded interest bearing certified bonds. According to the agency, the issue is the Company’s senior unsecured debt. Under the ACRA methodology, the recovery rate for an unsecured debt relates to Category II, so that the issue’s credit rating is equated to the credit rating of Setl Group, i.e. А-(RU). It will be remembered that on November 2, 2017 Setl Group placed 5 million Series 001P-01 bonds by public offering (identification No. 4B02-01-36160-R-001P of 26.10.2017.)

You may read the full text of the ACRA press release on the agency’s official website here: https://www.acra-ratings.ru/press-releases/1270

Share on social networks

Companies of Setl Group holding