AK&M Rating Agency confirmed the credit rating of STG

CJSC AK&M Rating Agency confirmed the credit rating of Stroytransgaz (STG) at “A” level on the national scale, 3rd sublevel, stable outlook.

“A” rating means that STG belongs to the class of borrowers with high credit standing. Risk of late performance of obligations is low, and the probability of the debt or the debt portion restructuring is minimal.

The most important factors supporting the rating of STG primarily include high volumes of construction contracts concluded and being performed; significant amounts of the contracts to be closed and fully paid by the customers in the current year, a good debt structure in terms of maturity and currencies, substantial financial support from the main shareholder of STG, and ongoing process of the company’s business optimization.

The company is constantly carrying out intensive work to expand the scope of its activities by participating in tenders and making preparations for conclusion of new contracts. This gives reason to hope for an increase in the volume of money receipts to STG in the coming years.

Good debt structure is a factor supporting the high rating. Long-term loans, which are the most reliable means of financing as related to investment activities, take a dominant share (81%) in the portfolio of STG, and this reduces the short-term debt load and increases financial stability. Besides, the share of loans of STG is currently 100 %, which ensures minimizing the currency risks in a volatile environment at financial markets.

It should be taken into account that the main creditor of the company today is the majority shareholder of STG whose share in long-term borrowing is 70%. Moreover, it is quite clear that, under these circumstances, if such need occurs, the current amount of long-term debt can be quite elastic upwards. Therefore, long-term crediting of the company by its majority shareholder can be regarded as a reliable financial support, and this has a positive effect on the credit rating of STG.

A significant positive factor influencing the rating is the ongoing process of optimization of the company’s structure and the diversification of its business. STG is now actively working in such highly profitable business areas as construction of electric power engineering facilities and road construction, and this increases resistance to the industry risks.