OREANDA-NEWS. RusRating has assigned a credit rating to OOO EvroStroi. The rating is "BB" on the international scale and "BBB" on the national scale, in both cases with a stable outlook.

The rating is based on loan guarantees provided by the owner of the Italmas retail centre, the market value of whose assets exceed the Company’s financial debt and associated interest obligations, as well as its own debt and interest obligations (including under guarantees); close business ties between the Company’s owners and BFG-Bank and so a high probability of refinancing in the event on unfavourable macro-economic developments; and the competitive sale price of the Italmas retail facility.

Constraining factors include a possible fall in demand for commercial real estate in response to weakening macro-economic conditions in Russia plus low operating profits and the resulting very high debt burden.

OOO EvroStroi is a limited liability company set up in 2012 that has taken in loans from BFG-Bank and invested in construction of the Italmas retail centre. Legally the Company has no property rights to any part of the facility, but all loan obligations are backed by guarantees issued by the property owner. The 54 000 m2 Italmas retail centre in the city of Izhevsk (Udmurtia) at the intersection of 40 let Pobedy and 10 let Oktyabrya streets is expected to open in the first quarter of 2015.

The Company’s assets consist mainly of material reserves and accounts receivable that ultimately reflect investments in the Italmas retail facility, while most external liabilities are BFG-Bank loans.

Its owners’ strategy calls for selling the Italmas centre as a whole to an outside investor interested in acquiring real estate for lease. The sale price (R74 000 per square metre) is competitive and will cover all outstanding debt and interest obligations, both of the Company itself and of the property owner (including conditional obligations under guarantees).