Fitch lifts outlook on some Russian corporates

Fitch Ratings said it revised the outlooks on three Russian companies following its revision of the Russian Federation's outlook to positive from stable and the affirmation of Russia's long-term foreign- and local-currency issuer default ratings at BBB.

The outlook was revised to positive from stable for Sukhoi Civil Aircraft JSC, which has BB long-term foreign-currency issuer default and senior unsecured ratings; JSC RusHydro, which has a BB+ long-term foreign-currency issuer default rating; and OAO AK Yakutskenergo, which has a BB long-term foreign-currency issuer default rating.

The agency said the ratings of Sukhoi Civil Aircraft are notched down from those of the sovereign as a result of purely verbal representations from state officials regarding the support the company can rely on from the Russian government for additional equity injections.

The ratings of RusHydro and Yakutskenergo are notched down from the sovereign's due to state ownership, the strategic importance of the companies to the state and their reliance on investment funding from the state or, in the case of Yakutskenergo, on state-controlled banks for the majority of debt funding and liquidity, Fitch said.

The outlooks for JSC Russian Railways (BBB) and its subsidiary, OJSC Transcontainer (BB+), remain stable. Russian Railways continues to benefit from strong links with the government, but Fitch said full and timely financial support, which would allow continued rating alignment, is not certain without explicit guarantees.

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