Fitch rates Russian Railways notes BBB

Fitch Ratings said it assigned RZD Capital Ltd.'s proposed loan participation notes an expected senior unsecured BBB rating.

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

The proceeds will be used by the company in the ordinary course of its business.

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

The ratings reflect its 100% state ownership and strategic importance to the Russian Federation's economy, Fitch said.

Although the company continues to benefit from strong links with Russia's federal government, full and timely financial support is not certain without explicit guarantees, the agency said.

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