Moody's ups Cai Ferate to Ba2

Moody's Investors Service said it upgraded the corporate family rating of Romania's Compania Nationala de Cai Ferate SA to Ba2 from B2, concluding a review initiated on June 23.

The outlook is positive.

The rating also reflects Moody's expectation that, if required, the Romanian government would most likely provide financial support for the company. While it does not have a special legal status, the company provides most of Romania's railway infrastructure, a critical means of transportation given the country's relatively underdeveloped road network.

The rating is constrained by the company's very poor financial position, evidenced by continued operating losses and negative net worth; its precarious liquidity position, which has been further hindered by operational problems caused by the extensive floods in Romania this year, and the company's dependence on the Romanian government for funding and subsidies.

The positive outlook reflects the positive outlook of the Romanian government's rating.

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