Fitch has upgraded the credit rating of Railways

Fitch повысило кредитный рейтинг Укрзализныци

The rating of Railways increased by one position

The increase became possible thanks to the recent revision of the sovereign rating of Ukraine.

A leading international rating Agency Fitch Ratings raised the long-term and short-term credit rating of JSC “Ukrzaliznytsya” in foreign and national currency up to the sovereign level “B” from “B-“. On Thursday, September 12, the press service of Ukrzaliznytsia.

“This increase was possible due to the recent revision of the sovereign rating of Ukraine, which generally limits the maximum rating level for the quasi-sovereign companies such as Ukrainian Railways, is the result of consistent policy of financial companies, in particular the increased liquidity Ukrzaliznytsya”, – stated in the message.

The company also reminded that financial and economic indicators of the Railways give confidence to investors in its stability, which allowed to raise additional borrowing in the international capital market amounting to $ 100 million, the cost of which is almost 100 basis points lower than in July of this year.

Today’s rating upgrade of the railroad, convinced the company will further reduce the cost of borrowing.

“This is a very positive signal to foreign investors, especially in the context of opportunities to attract additional funding in the modernization and development of the company”, – said the head of the Board of railroad Evgeny Kravtsov.

Fitch expects the growth in freight volumes and the deregulation of the wagon component, conducted in late 2018, the company’s revenue in 2020 will exceed 100 billion.

In addition, the increase in income will contribute to the expected recovery of the economy of Ukraine according to forecasts by Fitch Ratings, Ukraine’s GDP will grow by 3.2 and 3.5% annually during 2019 – 2021.

The rating Agency also forecasts in the medium term gradual improvement to 1x (2018 2, 2014 – 3) ratio of net debt to EBITDA (Net Debt/EBITDA). The Agency also expects that the company will improve to a 3-5% rate of margin free cash flow (FCF margin).

As indicated in the message Fitch, through the issue of Eurobonds for $ 500 million in July-2019 the company has significantly reduced the credit burden of refinancing the expected payments in the amount of $ 300 million, in the second half of 2019 and subsequent payments in 2020-2021 years.

We will remind, several days earlier, Fitch upgraded Ukraine’s rating

 

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