OREANDA-NEWS. JSC “Moscow United Electric Grid Company” (MOESK) continues the credit borrowings cost-cutting policy and applies the balanced approach to raising of external loans, creating the optimal structure of the debt portfolio.

Since the beginning of 2013, the weighted average interest rate on the credit portfolio has decreased by 43 basis points to 8.22 % per annum, and the volume of the credit portfolio, in its turn, decreased by 6.23% from RUR 52.5 bn to RUR 49.2 bn.

In the framework of implementation of competitive procedures to attract financial resources, which were won by JSC “Sberbank of Russia” and JSC “VTB”, long-term revolving credit facilities were signed. At the end of September of this year, MOESK carried out drawdown of credit resources on revolving facilities totaling RUR 10 bn at the rate of 8% per annum by five-year tranches.

“The banking credit market reacts positively to the trend of easing of the monetary policy of the regulator, and the leaders of the banking sector were the first who responded to it,” Deputy Director General for Financial and Economic Activity and Corporate Governance of JSC “MOESK” Alexander Inozemtsev comments. According to him, the bond market is not yet ready to decrease and is just beginning to recover from the correction which was created by the rumors of a sharp reduction in the quantitative easing program in the U.S.A. Thus, the credit institutions estimate MOESK above the level of the current credit ratings assigned to the Company, interest rates on new loans correspond to the levels of profitability of corporate bonds with the sovereign rating.

According to the analysts of the financial group “Brokercreditservice”, the leverage of MOESK is at a comfortable level: net debt/EBITDA is nearby 1.0x. Raising of long-term borrowings from Russian banks will allow the energy company for optimization of the maturity structure of the credit portfolio. In addition, the terms of credit facilities are more profitable in comparison with an alternative source of financing - public debt market. When placing the ruble bonds with a comparable maturity period, MOESK can expect the profitability of 8.40-8.60%. Thus, the choice in favor of the bank lending is optimal from the point of view of the debt servicing cost.

According to Alexander Kostyukov, the analyst from IC “Veles Capital”, reduction in the cost of debt service besides additional optimization of costs will allow MOESK for improvement of the financial stability. “In terms of impact of the upcoming state regulation of the industry on the company - freezing of tariffs of natural monopolies and mandatory dividend payment of state-owned companies in the amount of 25-35% out of net profit, MOESK will look more confident among other regional distribution companies, which can increase the interest of potential investors. In addition, the company pays dividends regularly over the past four years, which is rather an exception in the sector,” Alexander Kostyukov said.