Moody's rates Ceske drahy bonds Baa1

Moody's Investors Service said it assigned a definitive Baa1 issuer rating to Ceské dráhy, as and a definitive Baa1 senior bond rating to the company's €300 million of notes, which were issued on June 24 and will mature in 2016.

The outlook is negative.

The definitive ratings are in line with the previously assigned provisional rating and follow the successful placement of the company's inaugural bond issuance of €300 million as well as Moody's review of the final documentation of the issued euro notes, the agency said.

The ratings considers a baseline credit assessment of 11, the A1/stable local-currency rating of the Czech government, the high probability of government support and very high default dependence, the agency added.

The ratings also reflect the execution risk related to the company's capital investment program and the associated expected negative free cash flow as well as its structurally weak liquidity position and the limited size of the company compared with certain other European railways companies, Moody's said.

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