ACRA assigns ААA(RU) to RU000A1018M7 bond issued by Limited liability company “Special Organization for Project Finance Factory of Project Finance”

Credit rating rationale. ACRA is of the opinion that the bonds issued by the “Special Organization for Project Finance” (the Issuer), a full subsidiary of VEB.RF AAA(RU) under the program “Factory of Project Finance,” hold the same risk as VEB.RF (the Credit Support Provider). Additional security is provided by a state guarantee from the Russian Federation (The Guarantor). ACRA has assigned a AAA(RU) credit rating to this debt instrument.

Key issue properties

Issue volume

RUB 10 bln

ISIN

RU000A1018M7

Issue date/maturity date

December 25, 2019/December 25, 2026

Key rating assessment factors

The credit rating is fully based on the financial support and guarantee provided by VEB.RF and the Russian Federation (described below). This rating applies only to the RUB 10 bln under the bonds (ISIN RU000A1018M7) issued by LLC “SOPF FPF” and does not assess the “Factory of Project Finance” program as a whole. No analysis was performed on the underlying project/assets belonging to LLC “SOPF FPF” under the “Factory of Project Finance” program.

VEB.RF provides financial support during the life of the program via the following mechanisms:

VEB.RF is obligated to buyback all defaulted assets in LLC “SOPF FPF” portfolio within 5 working days as per Government regulation No. 158, dated February 15, 2018 (as amended on June 13, 2019) “On the ‘Factory of Project Finance’ program (together with the ‘Rules for providing subsidies from the federal budget in the form of property contributions from the Russian Federation to the State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ for reimbursement of expenses in connection with the provision of loans within the framework of the ‘Factory of Project Finance’).” In addition, VEB has provided a liquidity facility to LLC “SOPF FPF” to cover issues with short-term liquidity of up to RUB 20 bln. Under Government regulation No. 158, VEB is obligated to provide LLC “SOPF FPF” with financial support free of charge for the performance of their obligations in other forms. ACRA did not consider this factor in its analysis, as the “other forms” are not yet defined. Nevertheless, ACRA believes that the previously described mechanisms are enough confirm that the credit risks of the rated bonds issued by LLC “SOPF FPF” are equivalent to the credit risk of VEB.RF

State guarantee. The Ministry of Finance of the Russian Federation has issued a guarantee of up to RUB 294 bln to cover the principal value of the bonds should the Issuer fail to fulfill its obligations (which implies the failure of VEB.RF to fulfill the obligation of providing financial support to the Issuer described in the mechanism above). Guarantee No. 04-04-10/520, dated December 29, 2018.

Regulatory disclosure

The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Structured Finance Instruments and Obligations under the National Scale for the Russian Federation, the Methodology for Assigning Credit Ratings to Individual Issues of Financial Instruments 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.

A credit rating has been assigned to the bonds (RU000A1018M7) issued by Limited liability company “Special Organization for Project Finance Factory of Project Finance” for the first time. The credit rating is expected to be revised within one year following the publication date of this press release.

The assigned credit rating is based on the data provided by Limited liability company “Special Organization for Project Finance Factory of Project Finance.” The credit rating is solicited, and Limited liability company “Special Organization for Project Finance Factory of Project Finance” participated in its assignment.

No material discrepancies between the provided data and the data officially disclosed by Limited liability company “Special Organization for Project Finance Factory of Project Finance” in its financial report have been discovered.

ACRA provided no additional services to the Limited liability company “Special Organization for Project Finance Factory of Project Finance.” No conflicts of interest were discovered in the course of credit rating assignment.

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