21.01.2016, 21:49
Dvina Capital's Credit Rating Lowered
OREANDA-NEWS. National Rating Agency has lowered its national scale credit rating on Dvina Capital LLC, materializing its Indefinite outlook. The company's first-time individual credit rating was assigned by NRA on Mar. 28, 2013. The latest rating action on Dvina Capital (rating downgrade to 'BB-' and placement on the Watchlist Indefinite) dates Oct. 12, 2015.
The company's rating remains under review after its placement on NRA's Watchlist. NRA does not suspend the rating, but indicates the likelihood of a rating action in the near term, including affirmation, downgrade by one or more notches, suspension or withdrawal or outlook revision.
The rating downgrade, along with NRAs decision to leave the rating on the Watchlist, are based on the high probability of a risk event, which may have material implications for Dvina Capital, namely, the company prosecution under case No.A41-1775/2015, that involves the sequestration of a land parcel in the village of Uspenskoe, Odintsovo District of Moscow Oblast. The Indefinite outlook is based on Dvina Capital being investigated by law enforcement agencies, the fact that has already affected the company's business and caused acessation of its operations. The sales of land parcels purchased with debt capital are currently suspended under an interim measure
request. In fact, the company has been servicing its bank loans in the absence of land sale proceeds, which has already affected its financial strength. The Indefinite outlook may translate into a rating action depending on results of legal proceeding or in case of Dvina Capital's financial condition weakening as a result of debt servicing. In NRA's opinion, the company is able to service its debt with internally generated funds (in a situation of suspended land sales) in the medium term. However, the legal proceedings have been lasting for more than nine months.
In any case, further developments are hardly predictable. NRA will closely monitor the situation around the legal proceedings and will come back to the issue of Dvina Capital's rating revision in three months after the latest rating update or take an appropriate rating action earlier, if the worst-case scenario occurs.
The company's rating remains under review after its placement on NRA's Watchlist. NRA does not suspend the rating, but indicates the likelihood of a rating action in the near term, including affirmation, downgrade by one or more notches, suspension or withdrawal or outlook revision.
The rating downgrade, along with NRAs decision to leave the rating on the Watchlist, are based on the high probability of a risk event, which may have material implications for Dvina Capital, namely, the company prosecution under case No.A41-1775/2015, that involves the sequestration of a land parcel in the village of Uspenskoe, Odintsovo District of Moscow Oblast. The Indefinite outlook is based on Dvina Capital being investigated by law enforcement agencies, the fact that has already affected the company's business and caused acessation of its operations. The sales of land parcels purchased with debt capital are currently suspended under an interim measure
request. In fact, the company has been servicing its bank loans in the absence of land sale proceeds, which has already affected its financial strength. The Indefinite outlook may translate into a rating action depending on results of legal proceeding or in case of Dvina Capital's financial condition weakening as a result of debt servicing. In NRA's opinion, the company is able to service its debt with internally generated funds (in a situation of suspended land sales) in the medium term. However, the legal proceedings have been lasting for more than nine months.
In any case, further developments are hardly predictable. NRA will closely monitor the situation around the legal proceedings and will come back to the issue of Dvina Capital's rating revision in three months after the latest rating update or take an appropriate rating action earlier, if the worst-case scenario occurs.
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