S&P: Ukrainian Railways notes B, on positive watch

Standard & Poor's said it placed the B- long-term corporate credit rating on the State Administration of Railways Transport of Ukraine (Ukrainian Railways) on CreditWatch with positive implications.

S&P also said it assigned a B rating to the group's proposed senior secured loan participation notes due 2018.

The assigned rating assumes that the company's short-term debt will be fully repaid with the proceeds of the proposed notes, the agency said.

The CreditWatch placement follows news that Ukrainian Railways plans to issue senior secured loan participation notes and reflects the possibility of an upgrade if the issuance is successfully completed under the preliminary terms and conditions, S&P said.

The company's financial risk profile is highly leveraged, reflecting its aggressive liquidity management resulting from its reliance on short-term debt, the agency said.

The ratings are supported by a very high likelihood for government-related entities and the government of Ukraine would provide timely and sufficient extraordinary support to the company if needed, S&P said.

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