RusRating assigns credit rating to ISU EFG-3 mortgage participation certificates
The rating is based on the significant market value of the property collateral and a loan guarantee from Vesper Real Estate.
Constraining factors include the high ratio of the current loan balance to the value of the property collateral, the borrower’s lack of revenues and high debt burden, and the complete absence of cash flows generated by the underlying property.
About the Certificates
The mortgage backing is managed by AO EFG Upravleniye Aktivami [trs. EFG Asset Management JSC], which holds Federal Financial Markets Service license no. 21-000-1-00827 dated 4 August 2011 to manage investment funds, mutual funds and non-state pension funds. Rules for managing the certificates (official registration no. 0043) were registered by the Central Bank on 19 November 2014. As of 23 September 2015 the mortgage was worth R3809.9mn. Interest obligations on the mortgage are calculated at 14.5% per annum. The associated loan and mortgage contracts are due to close on 31 August 2019.
About the Mortgage
The mortgage is a loan extended to ZAO Master Biznesa [trs. Business Master CJSC] backed by a 11 098 m2 non-residential building located in Moscow at ul. Bolshaya Polyanka, d.9, str. 1-6. Colliers International has valued the property at R5244.7mn.
About the Borrower
ZAO Master Biznesa is an SPV company set up to organise financing for the re-construction of premium-class apartments in Moscow at ul. Bolshaya Polyanka, d. 9, str. 1-6. Construction work is scheduled for completion in the summer of 2018.
The mortgage loan is backed by a guarantee issued by Vesper Real Estate (Cyprus) Limited, an investment holding that controls a range of real estate development companies. Vesper provides these companies with financial support as required and also conductions transactions with financial instruments. The company was set up in 2006 and has already completed a number of premium real estate development projects in Moscow.
Vesper Real Estate has approx. $220mn in assets and its annual revenues exceed $70mn. Its assets consist mainly of construction in progress on premium residential facilities in central Moscow plus a low-rise block in Jurmala (Latvia). Its ultimate beneficiaries are two Russian businessmen, Denis Kitayev and Boris Azarenko, who hold equal stakes in the group.