MoZAL OJSC's Credit Rating Affirmed at ‘A’, Outlook Negative
OREANDA-NEWS. National Rating Agency has affirmed its ‘A’ national scale credit rating on Moscow Plant for Automatic Lines and Special Machines OJSC (OAO ‘MoZAL’) and assigned a negative outlook. The rating had been originally assigned on July 26, 2012, and subsequently annually affirmed. The rating falls under the ‘Holding and Financial Companies’ section of the NRA's rating list.
The rating is still constrained by the concentration of risks on projects and activities, as well as the limited scope of business. The macroeconomic instability has a negative effect on the value of real estate owned by the company and on the timing of the project, the final stage of which involves a complete sale of the property complex. The revision of sales plans leads to increase in a lending term and in the cost of servicing borrowings, which finance capital investments in reconstruction. The negative outlook has been assigned due to the presence of currency risk on account of high proportion of the debt denominated in foreign currency. The USD exchange rate has grown significantly over the past year, which has a strong negative impact on the cost of debt servicing, the size of debt portfolio in rubles, and the company's financial stability. The Agency plans to revise the rating at the end of the Q1 of 2016, when NRA will evaluate the changes in the exchange rate and its impact on the company's performance, as well as compare the actual data with the planned sales.
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