S&P affirms Russian Railways

Standard & Poor's said it affirmed the BBB+ long-term corporate credit and ruAAA Russia national scale ratings on Russian Railways, owned by the Russian Federation (foreign-currency BBB+/stable/A-2; local-currency A-/stable/A-2; Russia national scale ruAAA).

The outlook is stable.

Ratings reflect expectation of strong financial support from the state, the company's monopoly status as national railroad infrastructure operator, domination of the national railroad market, a still strong financial profile with commitment to a moderate financial policy and the strong competitiveness of railroads in Russia, S&P said.

The strengths are offset by exposure to Russia's transitional economy, growing railroad industry competition, restructuring risk from the ongoing railway reform, low tariff regulation transparency, exposure to commodities traffic and a large medium-term investment program, the agency said.

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