Credit rating rationale. The issue represents senior unsecured debt of PJSC “MegaFon” (hereinafter – the Company, or MegaFon). 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. According to the ACRA methodology, the credit rating of the issue is equivalent to that of MegaFon, i.e. AA(RU).

The credit rating of PJSC “MegaFon” is determined by the very large scope of the Company and by very high profitability, strong business profile, very strong liquidity position, and very high level of corporate governance. The rating is under pressure of the medium leverage and weak cash flow.

Key issue properties

Borrower

PJSC “MegaFon”

Issuer’s credit rating

AA(RU), outlook Stable

Actual issuer

PJSC “MegaFon”

Type of security

Exchange-traded interest-bearing certified unregistered bond, BО-001Р-04

Issue volume

RUB 20 bln

ISIN

RU000A0ZYTM6

Final placement date

February 19, 2018

Maturity date

February 15, 2021

Regulatory disclosure

The credit rating has been assigned under the national scale for the Russian Federation and is based on the Methodology for Assigning Credit Ratings to Individual Issues of Financial Instruments Under the National Scale of 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 bond issue (RU000A0ZYTM6) of PJSC “MegaFon” for the first time. The credit rating is expected to be revised within one year following the rating action date (February 16, 2018).

The assigned credit rating is based on the data provided by PJSC “MegaFon”, information from publicly available sources, as well as ACRA’s own databases. The credit rating is solicited, and PJSC “MegaFon” participated in its assignment.

No material discrepancies between the provided data and the data officially disclosed by PJSC “MegaFon” in its financial statements have been discovered.

ACRA provided additional services to PJSC “MegaFon”. No conflicts of interest were discovered in the course of credit rating assignment.

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