Dagong HK assigns ‘BBB’ long-term global scale issuer credit rating to Russian Highways State Company

发布时间:2017-01-19 11:44:00    点击:

  19 January 2017

  Dagong HK assigns ‘BBB’ long-term global scale issuer credit rating to Russian Highways State Company.

  HONG KONG, 19 January 2017– Dagong Global Credit Rating (Hong Kong) Co., Ltd. (“Dagong HK”), an international credit rating company, today assigns its “BBB” long-term global scale issuer credit rating to Russian Highways State Company (“Avtodor”). The outlook is stable.

  The rating reflects our assessment of the Russian federal government’s credit profile and we consider its willingness to provide financial and managerial support to the company, especially in the event of financial distress, as very strong.

  The stable outlook reflects our view that the Russian federal government’s financial and managerial support for Avtodor as well as the company’s liquidity should mitigate the company’s relatively weak financial metrics (highlighted by rising leverage, inadequate EBITDA interest coverage), its small scale compared to its global peers, and uncertainties over traffic growth emanating from the on-going economic sanctions.

  Avtodor is a non-profit organization set up by a specific law of the Russian Federation in July 2009 to develop, construct and operate highway networks in Russia. Based in Moscow, the company designs, constructs, operates, and maintains national highways and related road facilities. The company plays an important role in the Russian government's transportation policy as it is one of the two entities, specifically set up by the government in order to design, build and operate the country’s highway networks, with no competition from private operators. At the end of FY2015, the highway length was 2,860 km, of which 639.4km is in the toll section. The company acts as a developer/broker for the highway construction projects through a Public-Private Partnership (PPP) model.

  We also expect the company’s financial leverage to rise in the next 3 years in relation to a potential federal budget cut in the next 2-3 years. However, we also forecast Avtodor’s liquidity to be abundant on its role as a payment agent between the federal government and concessionaires and on a long track record of state subsidies which have been available for the company.

  More importantly, we believe the Russian Federal government has very strong willingness to support Avtodor. Our assessment reflects Avtodor’s systemic importance to the Russian federal government and its willingness to support the company on an on-going basis and in the event of financial distress. Avtodor’s budget plan was approved through 2020 and we expect the Russian federal government support for Avtodor to be forthcoming in the next 3 years.

  About Dagong HK

  Dagong Global Credit Rating (Hong Kong) Co., Ltd. is dedicated to providing a wide range of credit rating services for issuers and investors, mainly covering corporate and financial institutions ratings, which could contribute to debt issuances in financial markets. Dagong HK also provides credit risk research and other services related to credit ratings.

  Rating Methodology

  The principal methodology used in this Avtodor’s rating is Dagong HK’s Corporate Methodology published in July 2014, which can be reached at the website www.dagonghk.com.

  Rating Analyst

  Warut Promboon

  Chief Rating Officer

  (852) 3192 7069

  Warut.Promboon@dagonghk.com

  Irene Chan, CFA

  Analyst

  (852) 3192 7059

  Irene.Chan@dagonghk.com

  Michelle Lee

  Associate Analyst

  (852) 3192 7001

  Michelle.Lee@dagonghk.com

  Business Development Contact

  Jonathan Hu

  Senior Director, Business Development

  (852) 3695 5266

  (852) 9065 2130 (mobile)

  jonathan.hu@dagonghk.com

  Source: Dagong Global Credit Rating (Hong Kong) Co., Ltd.

  Disclaimer

  THE CREDIT RATINGS OR RESEARCH ISSUED BY DAGONG GLOBAL CREDIT RATING (HONG KONG) CO., LIMITED (“DAGONG HK,” “US,” “WE,” OR “OUR”) REFLECT OUR OPINION ON THE CREDIT CONDITION OF THE SUBJECT AND/OR INDUSTRY, WHICH INCLUDES THE ENTITY AND/OR ITS RELATED DEBT INSTRUMENTS (IF APPLICABLE), AS OF THE DATE THE CREDIT RATINGS OR RESEARCH IS ISSUED. NONE OF THE INFORMATION CONTAINED IN THE CREDIT RATINGS OR RESEARCH ISSUED BY DAGONG HK, NOR THE PUBLICATION ITSELF, SHALL BE CONSIDERED A RECOMMENDATION TO BUY, SELL, OR HOLD ANY SECURITY. THE CREDIT RATINGS OR RESEAERCH IS NOT INTENDED TO ADDRESS AND/OR REFLECT THE MARKET VALUE OF THE RATED ENTITY AND/OR ITS RELATED DEBT INSTRUMENTS (IF APPLICABLE). DAGONG HK ASSUMES NO RESPONSIBILITY FOR ANY LOSS OR DAMAGE ARISING FROM USE OF THE CREDIT RATINGS OR RESEARCH WE PRODUCE.

  IN RELATION TO PROVIDING CREDIT RATING SERVICES AND PRODUCING RESEARCH, DAGONG HK RELIES ON FACTUAL INFORMATION PROVIDED BY THE RATED ENTITY AND/OR ACQUIRED FACTUAL PUBLIC INFORMATION. DAGONG HK ENDEAVORS TO ENSURE THAT THE INFORMATION USED IN THE CREDIT RATINGS OR RESEARCH IS OF SUFFICIENT QUALITY; HOWEVER, NO AUDIT IS CONDUCTED BY DAGONG HK, AND NO IMPLICIT OR EXPLICIT GUARANTEE IS MADE OR SHALL BE ASSUMED FOR THE ACCURACY, CORRECTNESS, TIMELINESS, AND/OR COMPLETENESS OF THE FACTUAL INFORMATION AVAILABLE.

  The credit ratings included in the rating report were solicited and disclosed to the rated entity prior publishing. Neither the rated entity nor its related party did not participate in the credit rating process aside from providing the information requested by Dagong HK’s rating team.

  The credit ratings or research issued by DAGONG HK is not intended for distribution to, or use by, any person in any jurisdiction where such usage would infringe the law. Any user accessing information available through the research is responsible for consulting the relevant agencies or professionals accordingly and for complying with applicable laws and regulations.

  The contact information for the Complaint Officer is available at http://www.sfc.hk/publicregWeb/corp/BAY548/co.

  DAGONG HK expects and understands that users of the credit ratings or research provided by DAGONG HK are professionally trained and capable of exercising independent assessments when making investment and business decisions.

  None of the content related to the credit ratings or research produced by DAGONG HK may be modified, reproduced, distributed, or reverse engineered without prior written consent from DAGONG HK.

  For any further information on key elements underlying the rating and rating procedures, please refer to the following link: http://www.dagonghk.com/Procedures.php?parent_id=22

  DAGONG HK is a subsidiary of Dagong Global Credit Rating Co., Ltd. The Credit Rating Committee of DAGONG HK is responsible for and reserves the ultimate power of interpretation for the methodology used in its independent credit ratings or research.

  Copyright © Dagong Global Credit Rating (Hong Kong) Co., Limited 2017.