Fitch: Freight One on watch

Fitch Ratings said it is keeping OJSC Freight One's ratings on Rating Watch negative, including its BBB- long-term foreign- and local-currency issuer default ratings, its F3 short-term foreign- and local-currency issuer default ratings and its AA+(rus) national long-term rating.

The company's BBB- ratings include a one-notch uplift for parental support from JSC Russian Railways, its sole shareholder. On Oct. 28, Russian Railways will auction off 75% minus two shares of Freight One.

The agency said it views the existing standalone business and financial profile of Freight One as commensurate with a BB+ long-term issuer default rating. Consequently, the agency will no longer incorporate Russian Railways' parental support following the auction.

Fitch noted that Freight One's ratings may be impacted by the relative credit strength of a new majority shareholder and the parent-subsidiary arrangements put in place.

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