ACRA assigns А-(RU) to RU000A100MG6 bond issued by Setl Group, Ltd

Credit rating rationale. The 001P-02 series issue represents senior unsecured debt of Setl Group, Ltd (hereinafter, the Company). Due to the absence of either structural or contractual subordination of the issue, ACRA regards it as equal to other existing and future unsecured and unsubordinated debt obligations of the Company in terms of priority. According to the ACRA methodology, the reimbursement rate for unsecured debt relates to category II; hence, the credit rating of the bond issue is equivalent to that of the Company, i.e. A-(RU).

The credit rating of the Company is based on its very strong business profile, medium level of corporate governance, high business profitability, very low leverage, and strong liquidity. At the same time, very high industry risk puts pressure on the credit rating.

Key issue properties

Issuer

Setl Group, Ltd

Issuer’s credit rating

А-(RU), outlook Stable

Actual issuer

Setl Group, Ltd

Type of security

Exchange-traded interest-bearing non-convertible certified bearer bonds subject to mandatory centralized custody, 001Р-02 series

Issue volume

RUB 5 bln

ISIN/RegS

RU000A100MG6/4B02-02-36160-R-001P

Placement date

July 23, 2019

Maturity date

January 17, 2023

Regulatory disclosure

The credit rating has been assigned to 001Р-02 bond issued by Setl Group, Ltd under the national scale for the Russian Federation 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.

Loss recovery sources were assessed with a deviation from the methodology due to the specifics of inventory accounting for the housing construction industry.

The credit rating has been assigned to 001Р-02 bond issued by Setl Group, Ltd for the first time. The credit rating is expected to be revised within one year following the publication date of this press release.

The credit rating is based on data provided by Setl Group, Ltd, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited, and Setl Group, Ltd participated in its assignment.

No material discrepancies between the provided data and data officially disclosed by Setl Group, Ltd in its financial statements have been discovered.

ACRA provided no additional services to Setl Group, Ltd. No conflicts of interest were discovered in the course of credit rating assignment.

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