Fitch applies BBB- to RZD Capital LPNs

Fitch Ratings said it assigned RZD Capital plc's upcoming dollar- and ruble-denominated loan participation notes (LPN) an expected senior unsecured BBB-(EXP) rating, in line with JSC Russian Railways' long-term issuer default rating of BBB-/negative.

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

Russian Railways will use the proceeds to refinance existing debt. The noteholders will rely solely and exclusively on Russian Railways’ credit and financial standing for the payment of obligations under the LPNs.

Fitch said Russian Railways’ ratings continue to be aligned with those of the Russian Federation (BBB-/negative), reflecting its 100% state ownership, strategic importance to the Russian economy, strong operational links to the state, including tariff and capex approval by the government and track record of state support.

The agency views Russian Railways’ standalone profile as commensurate with a low BBB rating category.

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