Fitch rates Lenta BB-

Fitch Ratings said it assigned long-term foreign- and local-currency issuer default ratings of BB- to Lenta LLC, along with a national long-term rating of A+(rus).

The outlook is positive.

The agency also said it assigned a senior unsecured rating of BB- with recovery rating of RR4 to the company, along with a national senior unsecured rating of A+(rus).

The ratings reflect Lenta’s strong position in hypermarket food retail segment in Russia and the company’s ability to maintain strong operating metrics and profitability, despite accelerated store rollouts and focus on promotions, Fitch said.

A price-led business model and low share of discretionary non-food items will enable Lenta to maintain healthy like-for-like sales growth amid the current economic slowdown, the agency said.

The ratings also are supported by Lenta’s low leverage and strong financial flexibility, Fitch added.

The ratings are constrained by Lenta’s small scale as the sixth-largest food retailer in Russia and limited diversification outside its core hypermarket format, the agency said.

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