In 2015, the focus of the credit policy was mainly on fulfillment of obligations in relation to the contractual counterparties without exceeding the credit portfolio limit approved by the Business Plan. As of the end of the reporting period, the limits of the Company’s debt conformed to the provisions of the Regulations on Credit Policy (approved by the resolution of the Board of Directors dated November 7, 2013 (minutes No. 209 dated November 8, 2013), and the Company credit capacity conformed to the top level “A”.
Structure of Borrowings, RUB mln
|Source of debt||December 31, 2013||December 31, 2014||December 31, 2015||December 31, 2015/ December 31, 2014, %|
|Borrowed funds (total), including||57,527||73,407||73,414||0.01|
|Loans (total), including:||42,165||52,895||55,958||5.79|
|Bond issues (total), including:||15,362||20,512||17,456||-14.90|
|Finance lease liabilities||23||72||49||-32.62|
The structure of Company borrowings mostly consists of long-term accounts payable. Reduction of the short-term accounts payable under loan agreements is attributable to the repayment of principal amounts in accordance with the repayment schedules of the corresponding loan agreements. Reduction of short-term debt on securities in 2015 is attributable to repayment of bonded loan on bonds with BO-01, BO-02 series.
Structure of Credit Portfolio with Breakdown to Reporting Dates
|Creditor||As of December 31, 2014||As of December 31, 2015|
|Average weighted rate* %||Average weighted validity period* years||Amount of raised funds RUB mln||Average weighted rate* %||Average weighted validity period* years||Amount of raised funds RUB mln|
Variation of Borrowing in 2015, RUB mln
Average Weighted Rate for Borrowed Funds Servicing, %
Information on Issued Bonds
|Type of securities||Certified, interest-bearing, non-convertible, exchange-traded bearer bonds|
|Scope of issue, RUB thous.||5,000,000||5,000,000||5,000,000||5,000,000||7,000,000|
|Quantity, mln ea.||5||5||5||5||7|
|Par value, RUB||1,000||1,000||1,000||1,000||1,000|
|Date of state registration of issue||03.07.2012||03.07.2012||03.07.2012||09.07.2013||09.07.2013|
|Maturity / offer date||18.09.2015||26.10.2015||10.02.2016||12.09.2024/ 25.09.2017||23.04.2025/ 04.05.2018|
|Coupon yield per 1 bond||43.88||43.88||42,38||54.85||65.82|
|Stock exchange||CJSC MICEX Stock Exchange|
|Quotation list||First level||Third level|
|Scope of issue in circulation|
|as of December 31, 2014||5,000,000||5,000,000||5,000,000||5,000,000||-|
|as of December 31, 2015||-||-||5,000,000||5,000,000||7,000,000|
|Existing bond debt||-||-||-||-||-|
In order to optimize its credit portfolio, in May the Company placed exchange-traded bonds of BO-07 series with the total par value of 7,000 mln rubles on CJSC MICEX Stock Exchange. This issue provides for an offer after 3 years after placement start date and a call option after 1 year based on the par value. The maturity period for bonds of BO-07 series is 10 years. Based on the results of book building completion, the final coupon rate was set at 13.20% per annum.
These finances were raised in the framework of the Company’s Business Plan for 2015.
On September 18 and October 26, the Company successfully paid up its bonded loans with three-years maturity period (BO-01 and BO-02 series respectiv ely) which were placed at the r ate of 8.80% with the total par value of 10,000 mln rubles and paid up the remaining coupons, i.e., the Company duly fulfilled its obligations in relation to the holders of securities.
The total amount of earnings paid on BO-01 and BO-02 seriesRUB mln
The Company also has exchangetraded bonds of BO-05, BO-06, BO-08, BO-09, BO-10 series for the total par value of 38,000 mln rubles, which are ready for placement. The maturity term of each borrowing is 10 years after the placement start date.
The issues were included into the list of securities allowed for trading on CJSC MICEX Stock Exchange with assignment of the following identification numbers: 4B02-05- 65116-D, 4B02-06-65116-D, 4B02- 08-65116-D, 4B02-09-65116-D and 4B02-10-65116-D.
The Company plans to sell the securities through open subscription in the favorable market conditions.
Information of Assigned Credit Ratings
|Agency||Rating according to international scale||Rating according to national scale||Date of assignment /update|
|Standard and Poor's||BB-||stable||RuAA-||04.02.2015|
Currently, PJSC MOESK has ratings assigned by the leading global rating agencies: Fitch Ratings (BB+), Moody’s (Вa2), Standard and Poor’s (ВВ-)
March 25, 2015, Moody’s confirmed the Company’s credit ratings at the level of Аa2.ru according to the national scale and the level of Ba2 according to the international scale, negative outlook. December 7, 2015, the rating agency confirmed the credit ratings and upgraded the outlook to stable. This resolution was made following the change of the outlook for governmental bonds in the Russian Federation to stable on December 3.
February 4, 2015 Standard & Poor’s confirmed the Company’s credit rating in the foreign currency at the level of BB- with stable outlook.
October 2, 2015, Fitch Ratings confirmed the Company’s credit rating in the foreign currency at the level of BB+ with stable outlook.
According to the rating agencies, the dominant position of MOESK in the market due to its role of the main distribution grid company in Moscow and Moscow region as well as the stability of cash flows from the regulated power distribution business and favorable, mostly long-term, nature of borrowings have positive influence on the ratings.
Key Indicators and Ratios
|Category||as of December 31, 2013||as of December 31, 2014||as of December 31, 2015||December 31, 2015/ December 31, 2014, %|
|Debt, RUB mln.||57,527||73.407||73.414||0.01|
|Net debt, RUB mln||56.046||69.226||73.214||5.8|
|Net debt/ EBITDA, х||1.5||1.9||1.7||-8.2|
|Interests payable, RUB mln||2.448||3.457||4.787||38.5|
|EBITDA/interests payable, х||14.9||10.6||8.8||-17.0|
The total amount of Company debt in the reporting period was 73,414 mln rubles. The Company managed to maintain its debt to EBITDA ratio (1.7) at the level, which is traditionally considered low for the power industry in general, and for the grids sector in particular. In the short-term perspective, the Company does not expect this ratio to exceed 2. Usually, when calculating the debt load, the bank and credit agencies consider the 3-4 value of this ratio as acceptable.
In 2015, the Company raised 27,479,700 thous. rubles, including:
- under facility agreements in the amount of 20,479,700 thous. rubles, including: - for debt refinancing — 14,826,926 thous. rubles;
- under bonded loan in the amount of 7,000,000 thous. rubles for debt refinancing.
- for financing of investments activities —5,652,774 thous. rubles;
Over the year 2015, debt service obligations in the amount of 27,433,137 thous. rubles were fulfilled.