Fitch rates Russian Railways notes BBB

Fitch Ratings said it assigned an expected BBB long-term issuer default rating of RZD Capital plc's upcoming loan participation notes issue in line with JSC Russian Railways.

The rating is contingent upon the receipt of final documents conforming materially to information already received and details regarding the amount, coupon rate and maturity.

The company has a long-term foreign-currency issuer default rating of BBB, long-term local-currency issuer default rating of BBB, long-term national rating of AAA(rus), short-term foreign-currency issuer default rating of F3, short-term local-currency issuer default rating of F3, local-currency senior unsecured rating of BBB and national senior unsecured rating of AAA(rus).

The notes will be issued on a limited recourse basis for the sole purpose of funding loans to Russian Railways.

The proceeds will be used in the ordinary course of business and repaying debt. The noteholders will rely solely on the company's credit and financial standing for the payment of these obligations, Fitch said.

The ratings are aligned with those of the Russian Federation, given its 100% state ownership and strategic importance to the Russian economy, the agency said.

The ratings reflect the strong links between the state and the company, including the annual tariff and capital expenditure approval by the federal government, the provision of federal and regional subsidies for passenger and freight transportation and direct equity injections to fund capital expenditure, Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.