Credit rating rationale. The issue represents senior unsecured debt of Setl Group, Ltd (hereinafter, Setl Group, or the Company). Due to the absence of either structural or contractual subordination of the issue, ACRA regards it as equal to other existing and future unsecured and unsubordinated debt obligations of the Company in terms of priority. As per the Agency’s methodology, the detailed approach was applied. According to ACRA’s estimates, the recovery rate for the unsecured debt belongs to category I, and therefore, the credit rating of the issue is the same as that of the Company, i.e. A(RU).
Proceeds from the placement of the bond issue will be used to replenish the land bank and refinance part of the corporate debt.
The credit rating of Setl Group is based on the Company’s strong market position, strong business profile, medium level of corporate governance, and high geographic diversification due to the implementation of projects mostly in Saint Petersburg. The still very low leverage and high coverage, along with the strong liquidity profile and very high profitability, result in the high assessment of the financial risk profile, while the medium cash flow continues to constrain the assessment of this factor.
Setl Group is the largest residential real estate developer in northwestern Russia. In 2023, the Company commissioned properties with a total floor space of 1.4 mln sq. m; according to the Unified Developer Resource, as of the start of March 2024, the floor space of apartments in properties under construction also amounted to 1.4 mln sq. m.
key issue properties
|
Borrower |
Setl Group, Ltd |
|
Issuer’s credit rating |
А(RU), outlook Stable |
|
Actual issuer |
Setl Group, Ltd |
|
Type of security |
Exchange-traded interest-bearing uncertificated non-convertible bond subject to centralized title registration, series 002Р-03 |
|
Issue volume |
RUB 12 bln |
|
Registration number |
4B02-03-36160-R-002P |
|
ISIN |
RU000A1084B2 |
|
Placement date |
March 29, 2024 |
|
Maturity date |
March 14, 2027 |
Sources: ACRA, issuer’s data
regulatory disclosure
The credit rating has been assigned to the series 002P-03 (RU000A1084B2) bond issue of Setl Group, Ltd 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 002P-03 (RU000A1084B2) bond issue of Setl Group, Ltd 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 Setl Group, Ltd, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and Setl Group, Ltd 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 no additional services to Setl Group, Ltd. No conflicts of interest were discovered in the course of credit rating assignment.
