Renaissance Capital Is Cut by S&P Over 'Financial Flexibility'
c.2009 Bloomberg News
Dec. 22 (Bloomberg) -- Renaissance Capital Holdings Ltd., the parent of the Moscow brokerage that shares its name, had its credit score cut one grade at Standard & Poor's, which cited a lack of "financial flexibility" and Russia's "high systemic risk."
The company's long-term credit rating was reduced to B, five levels below investment grade, from B+, S&P analysts led by Elena Romanova said in a statement distributed today. The outlook is negative.
"RCHL's business contracted twofold from June 30, 2008, to Sept. 30, 2009, while profits dropped by more than 70 percent," S&P said. The company also suffers from "reduced access to cash flows from its subsidiaries because of the group's recent ownership change," the rating company said.
That change was completed in July, after Mikhail Prokhorov, Russia's richest man, paid $500 million for 50 percent of Renaissance Financial Holdings Ltd., which controls most of RCHL's investment banking business in Russia, S&P said.
"RCHL is a Bermuda-registered holding company that owns a 50 percent stake in a complex group of companies with leading positions in Russia in brokerage, investment banking, and advisory," S&P said. "These various entities are based in the U.K., the U.S., Cyprus, Russia, Ukraine, Kazakhstan, and Africa."
--Editors: Colin Keatinge, James Cone.
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To contact the editor responsible for this story: Eddie Buckle in Berlin at +49-30-700-106-225 or ebucklebloomberg.net