ACRA ASSIGNS AAA(RU) TO THE SERIES 001P-07R (RU000A105PH6) BOND ISSUE OF “FEDERAL GRID COMPANY – ROSSETI”, PUBLIC JOINT-STOCK COMPANY

Credit rating rationale. The issue represents senior unsecured debt of the “Federal Grid Company – ROSSETI”, PUBLIC JOINT-STOCK COMPANY (hereinafter, the Company). Due to the absence of either structural or contractual subordination of the issue, ACRA regards it as pari passu to other existing and future unsecured and unsubordinated debt obligations of the Company. According to ACRA’s methodology, the credit rating of the issue is equivalent to that of the Company, i.e. AAA(RU).

The credit rating of the Company is on par with the financial obligations of the Russian Government due to the high level of support to the Company from the state and the medium degree of dependence of the state and the Company on homogenous risk factors.

This bond issue will not have a significant impact on the Company’s leverage and coverage indicators. Repayment of the Company’s main debt is spread over time. Combined with available credit lines and the availability of sufficient funds and deposits as of the current date, this indicates the high liquidity of the Company.

The corporate structure is currently being reorganized so that PJSC ROSSETI (ACRA rating AAA(RU), outlook Stable), Kuban Trunk Networks JSC, Tomsk Trunk Networks OJSC, and DVEUK-ENES JSC will be merged with the Company. It is planned that the reorganization will be completed in Q1 2023. Following the reorganization, the Company will become the monopoly operator of Russia’s main power grids and distribution grid systems. The controlling shareholder of the Company, with a share of no less than 75% plus one stock, will be the state represented by the Federal Agency for State Property Management (Rosimushchestvo). Electricity transmission services are a natural monopoly and are regulated by state tariffs.  

key issue properties

 Sources: ACRA, issuer’s data

regulatory disclosure

The credit rating has been assigned to the series 001P-07R (RU000A105PH6) bonds issue of “Federal Grid Company – ROSSETI”, PUBLIC JOINT-STOCK COMPANY under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.

A credit rating has been assigned to the series 001P-07R (RU000A105PH6) bond issue of “Federal Grid Company – ROSSETI”, PUBLIC JOINT-STOCK COMPANY for the first time. The credit rating is expected to be revised within one year following the publication date of this press release.

The credit rating was assigned based on data provided by “Federal Grid Company – ROSSETI”, PUBLIC JOINT-STOCK COMPANY, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and “Federal Grid Company – ROSSETI”, PUBLIC JOINT-STOCK COMPANY participated in its assignment.

In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.

ACRA provided additional services to “Federal Grid Company – ROSSETI”, PUBLIC JOINT-STOCK COMPANY. No conflicts of interest were discovered in the course of credit rating assignment.