S&P rates Novosibirsk bond BB+

Standard & Poor's said it assigned a BB+ long-term global-scale issue credit rating and ruAA+ Russia national scale rating to the RUB2 billion senior unsecured bond issued by the Russian city of Novosibirsk.

The seven-year amortizing bond will have 28 coupons with the first coupon-rate at 11.86%, S&P said.

According to the redemption schedule, 40% of the bond is to be repaid in 2017, 5% in 2018, 15% in 2020, 35% in 2011 and the remaining 5% in 2022, the agency said.

The ratings on Novosibirsk are constrained by the city’s relatively weak economy and Russia's volatile and unbalanced institutional framework, S&P said.

The city's budgetary flexibility is considered weak, the agency said.

These constraints are mitigated by Novosibirsk's satisfactory management quality and reasonable cost control, which results in average budgetary performance, adequate liquidity, low debt and very low contingent liabilities, S&P said.

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