Training on sovereign risk credit analysis, October 24

ACRA affirms AAA(RU) to Russian Post, outlook Stable, and AAA(RU) to bonds

In accordance with Article 19 of Federal Law No. 171-FZ dated June 29, 2018, Russian Post JSC (the Company) is a legal successor of Russian Post FSUE. In ACRA's opinion, the change in the legal form of the Company has had no material impact on the final credit rating of the Company. Therefore, ACRA affirms the credit rating of the Company and its bond issues at AAA(RU).

The credit rating of the Company hinges on the very high systemic importance of the Company for the Russian economy, very high influence of the government on the Company, very strong market positions, strong business profile, large size, and medium profitability and leverage. The standalone creditworthiness assessment (SCA) is restricted by the medium liquidity, moderate cash flow, and low interest coverage.

The Company is the operator of the Russian government postal network, operating in all regions of the country. The Company's product range includes all types of postal services (delivery of written correspondence and postal items, international postal service, etc.), money transfers and delivery of pension payments, utility payments, and it acts as a consumer goods supplier in remote towns and settlements.

Key assumptions

  • Growing revenues, as adjusted by the growth rate of retail goods turnover estimated by ACRA;
  • Company’s costs to grow in line with the inflation expectations of ACRA;
  • Public debt to be repaid in line with offer dates;
  • The Company to remain the sole state-owned postal network operator that delivers, among others, official notices sent by state authorities.

Potential outlook or rating change factors

The Stable outlook assumes that the rating will most likely stay unchanged within the 12 to 18-month horizon.

A negative rating action may be prompted by:

  • A significant decline in the Company’s systemic importance for the Russian economy;
  • A loss of state control over the Company or substantial changes in the industry laws.

Rating components

SCA: а-.

Support: on par with the RF.

Issue ratings

Bond loan, Certified exchange-traded interest-bearing non-convertible unregistered bond issued by Russian Post, subject to mandatory centralized storage BO-001R-04 series (RU000A0ZZ5H3); maturity date: February 24, 2028, issue volume: RUB 5 bln — ААА(RU).

Bond loan, Certified exchange-traded interest-bearing non-convertible unregistered bond issued by Russian Post, subject to mandatory centralized storage BO-001R-05 series (RU000A0ZZ5J9); maturity date: April 24, 2028, issue volume: RUB 5 bln — ААА(RU).

Bond loan, Certified exchange-traded interest-bearing non-convertible unregistered bond issued by Russian Post, subject to mandatory centralized storage, BО-001R-07 series,
ISIN RU000A1008Y3)
; maturity date: March 27, 2029, issue volume: RUB 5 bln — АAА(RU).

Bond loan, Certified exchange-traded interest-bearing non-convertible unregistered bond issued by Russian Post, subject to mandatory centralized storage, BО-001R-06 series, (ISIN RU000A100SZ3); maturity date: August 23, 2029, issue volume: RUB 5 bln — АAА(RU).

Bond loan, Certified exchange-traded interest-bearing non-convertible unregistered bond issued by Russian Post, subject to mandatory centralized storage, BО-001R-08 series, (ISIN RU000A100UT2); maturity date: September 11, 2029, issue volume: RUB 5 bln — АAА(RU).

Credit rating rationale. The issues represent senior unsecured debt of Russian Post. Due to the absence of either structural or contractual subordination of the issue, ACRA regards them as equal to other existing and future unsecured and unsubordinated debt obligations of the Company. According to the ACRA methodology, and taking into account high creditworthiness as well as the absence of any substantial secured debt obligations, the Agency applies a simplified approach, under which the credit rating of the issue is equivalent to that of the Company, i.e. AAA(RU).

Regulatory disclosure

The credit ratings assigned to Russian Post and bonds (RU000A0ZZ5H3, RU000A0ZZ5J9, RU000A1008Y3, RU000A100SZ3, RU000A100UT2) issued by Russian Post were assigned under the national scale for the Russian Federation and is based on the Methodology for Credit Ratings Assignment to Non-Financial Corporations under the National Scale for the Russian Federation, the Methodology for Analyzing Relationships Between Rated Entities and the State, and the Key Concepts Used by the Analytical Credit Rating Agency Within the Scope of Its Rating Activities. In the process of credit rating assignment to the above issues, the Methodology for Assigning Credit Ratings to Individual Issues of Financial Instruments under the National Scale of the Russian Federation was also applied.

For the first time, the credit rating assigned to Russian Post was published on April 24, 2018, the credit ratings assigned to bonds (RU000A0ZZ5H3, RU000A0ZZ5J9) were published on June 04, 2018, the credit rating assigned to bond (RU000A1008Y3) was published on April 10, 2019, the credit rating assigned to bond (RU000A100SZ3) was published on September 09, 2019, and the credit rating assigned to bond (RU000A100UT2) was published on September 25, 2019. The credit rating assigned to Russian Post and its outlook as well as the credit ratings assigned to bonds (RU000A0ZZ5H3, RU000A0ZZ5J9, RU000A1008Y3, RU000A100SZ3, RU000A100UT2) issued by Russian Post are expected to be revised within one year following the publication date of this press release.

The assigned credit ratings are based on the data provided by Russian Post, information from publicly available sources as well as ACRA’s own databases. The credit ratings are solicited, and Russian Post participated in their assignment.

Disclosure of deviations from the approved methodologies: the 'profitability' factor has been assessed not in line with the assessment range set forth in the methodology.

No material discrepancies between the provided data and the data officially disclosed by Russian Post in its financial statements have been discovered.

ACRA provided no additional services to Russian Post. No conflicts of interest were discovered in the course of credit rating assignment.

Log in

Forgot password

Sign up

Reset password

Reset password

Termsofuse

Полное использование материалов сайта разрешается только с письменного согласия правообладателя, АКРА (АО). Частичное использование материалов сайта (не более 30% текста статьи) разрешается только при условии указания гиперссылки на непосредственный адрес материала на сайте www.acra-ratings.ru . Гиперссылка должна быть размещена в подзаголовке или в первом абзаце материала. Размер шрифта гиперссылки не должен быть меньше шрифта текста используемого материала.