Fitch affirms Ukrainian Railways’ credit rating at ‘B’ and removes it from Rating Watch Negative

Against the backdrop of significantly improved liquidity, one of the leading rating agencies, Fitch Ratings, affirmed the Ukrainian Railways credit rating at 'B' with a Stable Outlook, removing its ratings from Rating Watch Negative (RWN).

The agency release said the removal of RWN reflects the company's improved liquidity position upon the issuance of USD300 million loan participation notes on 15 July 2021. Being an active participant in the international capital market, UZ continues to uphold continuous reputation of responsible debtor to its all debt obligations,, and meets all debt obligations in full, directing the bond proceeds at the repayment of the short-term debt, including the repayment of the Sberbank loan, USD50 million of bonds due on 15 September 2021 and some other facilities. Fitch views company’s liquidity sources sufficient to offset scheduled debt servicing by end-2021 and in 2022. UZ’s Standalone Credit Profile was raised to ‘B-‘ from ‘CCC’.

As reported previously in July, Ukrainian Railways successfully raised USD 300 million financing in the international capital market at 7.875% per annum maturing in 2026. These resources, as well as any cash flow benefits resulting from UZ’s successful bond issue and the potentially lower cost of debt service, are expected to enable the company to make ongoing investments aimed at improving the country’s transport and logistics infrastructure. Debt refinancing will lead to lower financial costs for UZ already in 2021.