OREANDA-NEWS. RusRating has assigned a credit rating to the ISU GK-3 mortgage participation certificates. The national-scale rating is "BBB-", with a stable outlook.

The rating is based on the substantial market value of the underlying property collateral, close business ties between the borrower and a larger financial-industrial group, and rent income generated by the property.

Constraining factors include the high ratio of the current loan balance to the collateral value and the borrower’s high debt burden.

About the Issue

The ISU GK-3 certificates are managed by OOO UK GeoKapital [trs. GeoCapital Management Company LLC], which holds Federal Financial Markets Service license 21-000-1-00662 dated 17 September 2009 to manage investment funds, mutual funds and non-state pension funds. Rules governing their management were registered on 23 October 2014 under number 0034. As of 15 June 2015 (the date of formation) the underlying mortgage was worth R24.79bn. Interest payments on the mortgage loan have been set at the key Central Bank lending rate + 5% per annum. Final repayment is due on 30 June 2030.

About the Mortgage

The ISU GK-3 mortgage participation certificates are backed by the 15 875.5 m2 Petrovski Passage retail and office centre owned by Stonebell Trading & Investments Limited and located in Moscow at ul. Petrovka 10, and by the 57 338.59 m2 Integral Business Centre owned by OOO Kommertsproyekt [trs. Commerce Project LLC] and located in Moscow at pr. Zavoda “Serp i Molot” vl. 10. According to a report prepared by an independent assessor, these properties are worth R32.57bn.

About the Borrower

Stonebell Trading & Investments Limited is a private-sector company registered in Cyprus whose principal line of business is leasing out real estate. It is the sole owner of the Petrovski Passage facility. The company’s debt burden is high, as is its operating margin.