S&P revises Leader Invest view to negative

S&P said it revised the outlook on Leader Invest JSC to negative from stable and affirmed its B long-term issuer credit rating. Leader is owned by Etalon Group and sees the group’s leverage increasing.

The rise stems from the group's about RUB 30 billion, acquisition facility from Sberbank (drawn in two tranches with five- and eight-year final maturity) to finance the Leader acquisition. This transaction more than doubled Etalon Group's debt and was not sufficiently balanced by Leader's incremental EBITDA.

“We also expect that Etalon Group's leverage will be negatively affected by new project finance debt, which would be raised to finance construction projects under new requirements from the Russian regulator,” said S&P in a press release.

“The negative outlook reflects our view that we may lower our rating on Leader if Etalon Group fails to maintain adjusted debt to EBITDA, considering project-finance debt, below 7x in 2020-2021,” the agency said.

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