Fitch: ZKM Gdansk bond BBB

Fitch Ratings said it assigned a long-term local-currency rating of BBB and national long-term rating of A+(pol) to Zaklad Komunikacji Miejskiej w Gdansku Sp. zoo's (ZKM Gdansk) 37.92 million in Polish zloty tram revenue bond issue due Dec. 30, 2024.

The floating interest revenue bonds have been issued under a 220 million in Polish zloty tram revenue bond program. The interest coupons on the issue will be paid semi-annually.

ZKM Gdansk is 100%-owned by the City of Gdansk, which has BBB+ ratings and a stable outlook, and is classified as a dependent entity of the Polish city due to its close links to Gdansk.

Over 90% of ZKM Gdansk's annual revenue comes from the city and is insulated from fluctuations in demand variables, such as the number of passengers or fares, Fitch said.

In addition, a contract between the city and ZKM Gdansk states that ZKM Gdansk's full transportation costs are covered by the city, the agency said.

This ensures a minimum profitability for the company and leads to the conclusion that the city is committed to ensuring its ongoing financial viability, Fitch said.

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