Moody's: Outlook negative for Russian Railways

Moody's Investors Service said it confirmed the ratings of Russian government-related issuer Russian Railways JSC, concluding the review for downgrade that began April 1. The outlook is negative.

The ratings confirmed are Russian Railways’ Baa1 senior issuer rating, special-purpose vehicle RZD Capital plc’s Baa1 senior rating and subsidiary Federal Passenger Co. OJSC’s Baa2 senior rating.

Moody's Interfax Rating Agency affirmed the Aaa.ru long-term national scale issuer rating of Russian Railways and the Aaa.ru national scale rating of Federal Passenger.

These rating actions follow Moody's confirmation of Russia's government bond rating at Baa1 with a negative outlook.

The agency said the confirmation reflects Moody's view that Russian Railways has strong linkages with the government and the company's rating remains constrained by that of the sovereign and Russian Railways continues to depend on the government's willingness to maintain the scope of its support at a level sufficient for Russian Railways to maintain its financial metrics in line with its conservative financial policy.

The negative outlook is in line with the negative outlook for the sovereign rating and reflects the fact that a potential downgrade of Russia's sovereign rating is likely to result in a downgrade of the companies' ratings, Moody’s said.

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