Fitch lowers UCL Rail view to negative

Fitch Ratings said it revised UCL Rail BV’s outlook to negative from stable, along with its key 100% subsidiary, JSC Freight One’s outlook to negative from stable.

Their long-term foreign-currency issuer default ratings were affirmed at BB+.

The agency also affirmed UCL Rail’s long-term foreign-currency issuer default rating at BB+, short-term foreign-currency issuer default rating at B, senior unsecured rating at BB+, long-term local-currency issuer default rating at BB+, short-term local-currency issuer default rating at B, local-currency senior unsecured rating at BB+ and national long-term rating at AA(rus).

Fitch also affirmed Freight One’s long-term foreign-currency issuer default rating at BB+, short-term foreign-currency issuer default rating at B, senior unsecured rating at BB+, long-term local-currency issuer default rating at BB+, short-term local-currency issuer default rating at B, local-currency senior unsecured rating for R$40 billion bond program at BB+, national long-term rating affirmed at AA(rus) and national local-currency senior unsecured rating at AA(rus).

The outlook revision reflects weaker market fundamentals in the form of declining freight volumes and rates, the agency said.

The ratings also consider UCL Rail’s position as the leading rolling stock owner and operator in Russia’s rail freight market, Fitch said.

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