OREANDA-NEWS. RusRating has changed the outlook on MFO MGIS’s credit ratings from “stable” to “negative” in response to shrinking business activity and the imposition of a financial rehabilitation programme at AKB Investtorgbank (the Company’s principal counterparty). The ratings themselves are unchanged at “BB” on the international scale and “BBB” on the national scale.

The rating is based on a leading position among loan service agents and the healthy quality of the pool of mortgage loans under management.

Constraining factors include heavy dependence on a single buyer (AKB Investtorgbank); a low operating margin; and high reliance on borrowed funds.

OOO MFO Mezhregionalnaya Gruppa Ipoteki i Servisa [trs. Interregional Mortgage and Service Group Micro-Finance Organisation LLC] (MGIS) was set up in 2005. Its principal lines of business are the issue, purchase and resale of mortgage loans, along with managing loan portfolios through to repayment. The Company’s principal counterparty is AKB Investtorgbank. As of 31 August 2015 the portfolio of loans under management totalled R6.8bn. MGIS is a market leader more or less across the country in terms of the volume of mortgages issued and refinanced. General Director T.V. Toloknova is its ultimate beneficiary owner.

Most assets take the form of mortgages extended by the Company itself; none are reported overdue. External funding consists mainly of loans used to finance the extension or purchase of mortgages. Risks to the stability of the Company’s business model are elevated, but cash flow is stable. Liquidity is sufficient. The delinquency ratio on the portfolio of mortgages under management is low. Overall risk sensitivity is elevated.