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Press Releases / 19.04.2013
Press Release as of 19.04.2013 TCS-Accounting LLC CJSC AK&M Rating Agency assigned an ‘A+’ reliability rating to TCS-Accounting LLC as per the national scale, with a stable outlook. The ‘A+’ rating indicates that the limited liability company Trewetch Corporate Services – Accounting maintains a high level of reliability. Risk of a failure to meet liabilities in full and in time is insignificant. The rating action appreciates the service company’s ability to fully and timely meet its obligations to maintain accounting records of mortgage agents (special-purpose vehicles set up for the sole purpose of acquiring receivables on loans secured by mortgage, later issuing and servicing mortgage-backed debt securities). The rating of TCS-Accounting LLC is essentially supported by its firm position in Russia’s mortgage securitization market, growing scope of business, broader diversification across economy sectors, and steady financial position. Today, TCS-Accounting LLC provides accounting services for six mortgage agents, three of them being mortgage bond issuers, the other three making the necessary preparations for issuing mortgage-backed securities. In 2009-2012, these mortgage agents effected 4 transactions (10 issues of securities) to place mortgage-backed bonds amounting to a total of RUB 12.703 billion, accounting for 20% of the total number of issues and 7% of the total nominal value of the securities issued in Russia’s national off-balance mortgage securitization market. The mortgage bond issues were originated by MBRD (currently MTS-bank), AHML (twice) and Housing Finance Bank. TCS Group is constantly increasing the scope of business, as proven by the growing total nominal value of the affiliated mortgage agents’ new issues of mortgage-backed securities: RUB 2.217 billion in 2009, RUB 3.725 billion in 2011 (increasing 1.7 times), RUB 6.722 billion in 2012 (increasing three times). While trailing the average market performance (2.7 times and 4.0 times, respectively), this growth still indicates a positive trend in the Company’s business development. The mortgage agents authorizing TCS-Accounting to maintain their accounting records are operating in full compliance with federal laws 152-FZ “On mortgage-backed securities”, 39-FZ “On securities market” and other regulatory instruments issued by state administrative and supervisory bodies. Coupon and principal payments on the mortgage bonds (subject to their nominal value) are effected in due time (4 times a year) and in full (meeting the terms of bond offering), indicating effective interaction of TCS-Accounting LLC with other parties to mortgage asset securitization deals. The Company’s accounting services provided to mortgage agents meet the necessary requirements, as proven by the favorable audit opinions of CJSC Intercom-Audit, a member of SRO NP Audit Chamber of Russia. Apart from keeping mortgage agents’ accounting records, the Company provides similar services to other corporate customers in various market segments under outsourcing contracts, earning almost 30% of its total income from such services in 2012. The financial position of TCS-Accounting LLC may be regarded as fairly stable. The Company’s debt burden is limited to accounts payable (current payments to employees, taxes and liabilities to mortgage agents and other customers consisting in advance payments for the services rendered), net debt to revenue ratio as of 12/31/2012 was 0.25. The comfortable liquidity position (absolute liquidity ratio: 94%, current liquidity ratio: 141% as of the same date) is another positive signal for the Company’s rating. The ROE and ROA ratios are comfortably high (38% and 35%, respectively, at the end of the last reporting year. In a word, the Company’s financial position enables it to focus entirely on its core business: maintaining accounting records of mortgage agents. This strong foundation is of great importance, given the Company’s ambition to expand the business horizon including, but not limited to, operations beyond the mortgage securitization market. At the same time, the lack of accounting experience with respect to mortgage agents (just over 3 years) and the inferior market position against its sole competitor (RMA-Service LLC) are exerting moderate pressure on the Company’s rating. TCS-Accounting LLC has been operating in the mortgage securitization market since 2009. Today, the Company provides accounting records maintenance services to the closed joint-stock companies Mortgage Agent of MBRD, Mortgage Agent of AHML 2011-1,Mortgage Agent HFB-1, Mortgage Agent Absolut, Mortgage Agent FORA, East-Siberian Mortgage Agent, and three other corporate customers. Investment Company TREWETCH Investments Ltd registered in Cyprus owns 99% of the authorized capital of TCS-Accounting LLC. The Chief Executive Officer of TCS-Accounting LLC is Tatyana Kachalina, an internationally rated corporate law, capital market, project financing, securitization and M&A expert.
This press release is based on the statement of assigning a reliability rating to TCS-Accounting LLC. 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 (as a prerequisite for including bonds in the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation base and for listing bonds). By a resolution of Russia’s GovernmentAK&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.
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