OREANDA-NEWS. RusRating has changed the outlook on OOO StroiEkologia's credit rating from "stable" to "negative". The rating itself is unchanged at "BBB" on the national scale and "BB" on the international scale.

The change in outlook is based on a further delay in the launch of construction and a resulting increase in the cost of building the Pelegrina Residential Complex.

The rating itself is based on strong support from the Company's owners, a high anticipated operating margin and internal rate of return on the Pelegrina project, the project's social orientation (aimed at providing comfortable and affordable economy-class housing), official backing and positive trends in the residential real estate market.

Constraining factors include high uncertainty risks on a new business project in its initial stages, a high debt burden and a limited market presence.

OOO StroiEkologia is a limited liability real estate development company set up in June 2003. Its current project is the mid-rise Pelegrina Residential Complex, located in Moscow region, with a planned floor space of 379 000 square metres. The Company's ultimate beneficiary owners are citizens of Russia and Ukraine with substantial financial resources and experience in real estate development and who have access to official backing.

At this time the Company's debt burden is extremely high and currency risk is elevated. Revenues are insignificant. Liquidity is sufficient. Risk sensitivity is high. Cash flows are expected to improve substantially once the project is under way: a large increase in revenues will improve operating returns and allow StroiEkologia to cut its debt burden. On the basis of official accounts most assets take the form of investments in affiliated companies, which arose in connection with financing for the early stages of the project. Prospects for re-financing obligations are strong thanks to the Company's considerable experience in accessing resources and the support provided by its owners.