S&P lowers Georgian Railway

S&P said it lowered the long-term corporate rating on Georgian Railway LLC to B+ from BB-, along with its senior unsecured bonds to B+ from BB-.

The outlook is stable.

The agency also said it affirmed the company’s short-term rating at B.

S&P also lowered the rating on GR's

The downgrades reflect the company’s increased financial leverage as a result of the decline in freight volumes in the first half of 2016, the agency said.

Leverage is expected to recover to previous levels in the next 12- to 24-months, S&P said.

The company has managed to grow volumes of crude oil transportation by up to 70% thanks to a contract with Turkmenistan, the agency said.

However, the smaller absolute numbers and lower profitability of crude oil operations limits the positive effect on overall performance, S&P said.

© 2015 Prospect News.
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