The 'A+' rating indicates the Company's high credit standing / reliability. Risk of a delay in meeting liabilities is relatively low, restructuring risk for a loan / part of a loan is minimal.

Open joint-stock company Small Business Targeted Guarantee Fund of Saratov Region (OJSC Fund) operating as a regional guarantee organization is a constituent element of the SME support infrastructure in Russia's federal subject. The fund's mission is to provide guarantees for loans and other debt obligations of SME businesses registered in the region, where collateral coverage is insufficient.

The guarantee institution's rating is essentially supported by its strong performance, robust guarantee coverage, and relatively low amount of risk assumed.

Over the period from its inception in 2009 to October 1, 2013, the fund has provided 356 guarantees for a total of RUB 580 million, with the result of raising extra-budgetary funds in the amount of RUB 1,565 million for financing SME businesses. The total amount of guarantees valid as of October 1, 2013 was RUB 313.2 million, which is fairly high, given the number of small businesses in the region. The guarantee capital multiple is about 220%, indicating a highly efficient use of budgetary resources.

The guarantee fund has deposited its money in accounts with 6 credit institutions rated at least 'A' on the AK&M Rating Scale. The maximum relative weight of the funds deposited with one bank is 21.5%, far below the maximum percentage set by the regulatory authority. Financial investments of the fund are well diversified in terms of amount and maturity. These achievements indicate a robust guarantee coverage of the fund's off-balance sheet liabilities. Some of the fund's bank deposit contracts provide for possible partial withdrawal of the deposits without losing interest, which ensures a strong liquidity position of the fund.

The main problem for OJSC Fund comes from the hyper-geometrically growing number and amount of indemnity payments due under surety agreements. In particular, the fund effected only one payment in the amount of RUB 393 thousand in 2011 followed by two obligations (RUB 824 thousand) discharged in 2012, but had to satisfy claims from six creditors for a total of more than RUB 12 million this year. We tend to attribute this situation to failures in the fund's risk management system in 2010-2011.

Despite this negative trend, the guarantee institution's loss ratio (2.30%) is still below the maximum percentage set by the regulatory authority (4.34%). We regard the potential risks inherent in the current portfolio of surety commitments as fairly low. In particular, AK&M Rating Agency's statistical model estimates the short-term risk of financial destabilization (partial loss of stockholder equity) at 6.2%, within the range corresponding to the rating assigned. We also appreciate the fund's staffing measures taken in 2012 to improve the quality of its risk management system as an offsetting rating driver.

Open joint-stock company Small Business Targeted Guarantee Fund of Saratov Region (OJSC Fund) was established on October 08, 2007 by the Government of Saratov region (represented by the Ministry of Economic Development and Trade) acting as its sole founder (shareholder).

Over its existence, the guarantee institution has concluded more than 350 surety agreements amounting to over RUB 1.5 billion, raising 12.5 rubles in SME-targeted external investments per each ruble of the public sector invested. As of November 1, 2013, the guarantee institution's portfolio of surety commitments totaled RUB 235 million, the amount of funds raised (loan balance) being RUB 807 million.

This press release is based on the statement of assigning a guarantee institution credit rating to OJSC Fund.

The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's credit worthiness and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities to the Company.

CJSC AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

CJSC AK&M 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).

AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Regulation 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide cash and settlement services to project and engineering companies implementing investment projects), and the MICEX (for the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation and bond listing purposes). By a resolution of Russia's Government AK&M Ratings count for the recapitalization of banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.

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.