Fixed Income Weekly:
- Mosmart-1

Name: 05/04/2007. FC URALSIB: Fixed Income Weekly: - Mosmart-1
Creator: Cbonds
License: https://creativecommons.org/licenses/by/4.0/

05/04/2007 | FC URALSIB

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Mosmart-1

Established in 2003, Mosmart is a multiformat food retail chain that operates in Moscow and has limited presence in other Russian cities, such as St Petersburg, Krasnodar, Chelyabinsk.

Retail chain operator Mosmart is owned by holding company Sarnatus Trading LTD (Cyprus). The end beneficiaries of Sarnatus are Mikhail Bezelyansky, Andrei Shelukhin, and two investment funds: ENR Securities Limited and Eastern Property Holdings Limited.

As mentioned above, Sarnatus also owns ZAO Gipertsentr and ZAO Giertsentr-5 – developer companies that hold the four Mosmart hypermarkets on their balance-sheets. Mosmart therefore leases this property from these two companies, so the two arms of the holding, retail and development, appear to be more or less independent.

The proceeds from the debut bond issue (~USD77m) will be used to finance chain expansion (67.5%) and repay a bridge loan provided by the issue lead manager (32.5%).

The lead-managers preliminary guidance assuming a one-year put option is around 11.55%. We believe Mosmart-1 is attractive at 12% and above.

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