Fitch rates Russian Railways notes BBB

Fitch Ratings said it assigned an expected senior unsecured rating of BBB to RZD Capital plc's 2.177% CHF 525 million loan participation notes due 2018 and 2.730% CHF 150 million loan participation notes due 2021.

The rating on the notes is in line with JSC Russian Railways' long-term issuer default rating of BBB.

The outlook is stable.

The notes will be issued on a limited recourse basis for the sole purpose of funding loans to Russian Railways.

The proceeds will be used in the ordinary course of its business, including repayment of debt. The noteholders will rely solely on Russian Railways' credit and financial standing for the payment of obligations under the notes, Fitch said.

The ratings are aligned with those of the Russian Federation, given its 100% state ownership and strategic importance to the Russian economy, the agency said.

The ratings reflect the strong links between the state and the company, including the annual tariff and capital expenditure approval by the federal government, Fitch said.

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