S&P upgrades CFR Marfa

Standard & Poor's said it raised its long-term corporate credit rating on CFR Marfa SA to B+ from CCC and removed the rating from CreditWatch, where it was originally placed on Aug. 10.

The outlook is developing.

The agency said the upgrade and CreditWatch resolution reflect significant improvement in Marfa's liquidity position and debt maturity profile following the refinancing of its €120 million eurobonds.

Marfa's liquidity position and debt maturity profile remain weak, however, due to very limited headroom under existing financial covenants, S&P said, and the rating reflects Marfa's continued traffic decline, strong competition in the Romanian transport sector, the company's aged and obsolete rolling stock fleet, an inflexible cost structure that aggravates operational risk, limited financial flexibility and floating-rate exposure.

In the agency's view, these risks are mitigated by Marfa's strong market position; continued Romanian transportation market growth; and adequate cash flow protection, debt maturity profile and liquidity for the rating.

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