OREANDA-NEWS. RusRating has changed the outlook on OOO Zabaikal Region Guarantee Fund’s credit rating from “stable” to “negative”. The rating itself is unchanged at "AA-" on the national scale and "BBB-" on the international scale.

The negative outlook reflects a fall in capital adequacy against a background of negative financial results. As of 1 October 2014 the ratio of own funds to the guarantee portfolio was 24.1% (industry average 84.02%).

The rating is based on modest pay-outs on the Fund’s guarantees, a well-diversified guarantee portfolio, healthy asset quality, and state backing.

Constraining factors include low capital adequacy and loss-making operations.

In the absence of fresh capital investments over the next six months a rating cut is likely.

About the Fund

The Zabaikal Region Guarantee Fund was set up in 2008 to offer guarantees to small and mid-sized businesses in Zabaikal region. It is wholly-owned by the regional authorities.

Capital adequacy is low. The Fund’s principal obligations are off-balance guarantees; this portfolio is well diversified by both maturity and counterparty and pay-outs are modest. Asset quality is healthy. Interest revenues cover all operating costs. Liquidity is sufficient. Risk sensitivity is low.