Fitch Ratings affirmed the long-term foreign currency Issuer Default Rating (IDR) of
Strong links between the government and RZD include approval of capex and annual tariffs, provision of federal and regional subsidies, direct equity injections into key infrastructure projects, and most recently financing CPI-linked infrastructure bonds of RZD with the state pension fund. Fitch believes that a privatisation of a minority stake in the company is unlikely to occur until 2017.
At the same time, stand-alone credit profile of RZD is estimated in the mid-BBB category. The rating is driven by RZD's position as monopoly owner and operator of the rail infrastructure and sizeable operations in freight and passenger transportation. The ratings are limited by absence of long-term tariffs, exposure to commodity markets' risks, and limited geographical diversification. The credit metrics have weakened due to pressure on earnings and high capex.
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