CJSC AK&M Rating Agency assigned an 'A' national scale guarantee institution rating, tier 2, to the State Fund of the Kemerovo Region for Business Support, with a stable outlook.

The 'A' rating indicates that the State Fund of the Kemerovo Region for Business Support qualifies as a guarantee institution with a high degree of financial stability and a good level of SME assistance in the region. The full or partial default risk is low.

The State Fund of the Kemerovo Region for Business Support was established in 1996 as an entity affiliated with the government of Kemerovo region to ensure assistance to small and medium-sized businesses in Kemerovo region and to provide available loan facilities to SME entities in the region. The first surety was provided in 2009.

The guarantee institution's rating is supported by its high key performance indicators, reliable guarantee coverage and effective recovery of funds through applicable recourse procedures.

Over its existence (since 2009), the Fund has concluded 629 surety agreements for a total amount of RUB 1,113.9 million, which enabled borrowers to take out RUB 2,250 million in loans from the partner banks. In 2013, the State Fund of the Kemerovo Region for Business Support secured the 18th position in AK&M Rating Agency's 2013 Ranking of Guarantee Institutions comprising 51 entities ranked by the size of their respective surety commitments (the Fund's portfolio reaching RUB 508 million as of the end of 2013). On April 1, 2014, the guarantee capital multiple was 149%, an evidence of effective spending of budget funds by the Fund.

The Fund has deposited its resources with 5 Russian banking institutions ranking among the top 20 largest banks in terms of asset size. The maximum percentage of the Fund's deposit(s) with one bank is 32.6%, which is below the regulatory limit for a deposit per banking institution (34% for a guarantee capital of at least RUB 150 million).

In the first quarter of 2014, the guarantee institution recovered RUB 3.4 million in damages from the borrowers whose loan defaults forced the Fund to discharge payment obligations to partner banks; the recovery ratio is 19.7%, a relatively high result among the guarantee institutions rated by AK&M Rating Agency.

At the same time, the growing number of payments under surety agreements constrains the Fund's rating.

As of May 30, 2014, the State Fund of the Kemerovo Region for Business Support discharged 8 obligations to partner banks paying a total of RUB 17.4 million including RUB 10.5 million paid to credit institutions under two surety agreements in the first quarter of 2014. One surety-specific obligation in the amount of RUB 2 million was repaid in full. As a result, the Fund's loss ratio as of May 30, 2014 (in terms of the Ministry of Economic Development's Order 220 dated April 24, 2013) was 1.25%, 2.7 times above the relative loss ratio at the start of 2014.

The State Fund of the Kemerovo Region for Business Support was registered in June, 1996. The sole founder of the guarantee institution is the government of Kemerovo region.

Over its existence, the guarantee institution has concluded 629 surety agreements amounting to over RUB 1 billion, raising 7.5 rubles in SME-targeted external investments per each ruble of public investment. As of April 1, 2014, the guarantee institution's surety portfolio totaled RUB 488 million, the amount of funds raised reaching RUB 2,250 million. The Fund secured the 18th position in AK&M Rating Agency's H2 2013 Ranking of Regional Guarantee Institutions comprising 51 entities.

This press release is based on the Statement of assignment of a guarantee institution rating to the State Fund of the Kemerovo Region for Business Support.

The rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Fund's creditworthiness and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.

AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

CJSC Analysis, Consulting and Marketing Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.

CJSC AK&M Rating Agency

Ul. Gubkina 3, Moscow, Russia

www.akmrating.ru

Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.