Expected credit rating rationale. The series 001P-02 bond issue is a senior unsecured debt instrument of Borjomi Finance LLC (the Issuer), a subsidiary of Rissa Investments Limited (the Company, or the Group). The expected credit rating has been assigned based on the guarantee from the Group and draft public irrevocable offers from IDS Borjomi LLC, Aqua Star LLC, Edelweiss L LLC, Clear Water Company LLC, and Saint Spring Plant LLC, as well as the cross-default provisions on obligations of the Group and the companies within its consolidation perimeter in accordance with IFRS reports. In accordance with ACRA’s methodology, to assess the recovery rate, a detailed approach has been applied, according to which the recovery rate on the bond issue belongs to category II, and therefore the expected credit rating of the issue is equal to the credit rating of the Group, i. e. A-(RU), and is set at eA-(RU).
The Group’s credit rating is based on the medium business profile assessment and leading market positions, which is a result of the presence of well-recognized brands in the product portfolio. Regardless a decline in the sales in natural terms in 2022, the Group’s financial risk profile assessment remains unchanged, and it reflects the medium leverage, high coverage, and very high profitability. Weak free cash flow (FCF) is still a rating-constraining factor.
Rissa Investments Limited is a holding company that consolidates bottled water production assets in Russia, Georgia, and Ukraine. The portfolio of the Company’s brands includes Borjomi, Saint Spring, and others.
key issue properties
|
Borrower |
Rissa Investments Limited |
|
Guarantor’s credit rating |
А-(RU), outlook Stable |
|
Actual issuer |
Borjomi Finance LLC |
|
Type of security |
Exchange-traded interest-bearing non-convertible uncertificated bond subject to centralized title registration, series 001Р-02 |
|
Issue volume |
RUB 5–7 bln |
Source: ACRA, issuer’s data
regulatory disclosure
ACRA will assign a credit rating to the 001P-02 series bond issue after the final documentation is presented. In case of any significant discrepancies between the final documentation and the preliminary materials, ACRA may change the issue credit rating against the expected credit rating.
The expected credit rating has been assigned to the 001P-02 series bond issue of Borjomi Finance LLC under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Financial Instruments on 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.
The expected credit rating has been assigned to the 001P-02 series bond of Borjomi Finance LLC for the first time. ACRA will assign the final credit rating within one year following the publication date of this press release.
The expected credit rating is based on the data provided by Borjomi Finance LLC, Rissa Investments Limited, information from publicly available sources, and ACRA’s own databases. The expected credit rating is solicited, and Borjomi Finance LLC and Rissa Investments Limited participated in its assignment.
In assigning the expected 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 no additional services to Rissa Investments Limited and Borjomi Finance LLC. No conflicts of interest were discovered in the course of expected credit rating assignment.
