Fitch: Aeroflot notes BB-

Fitch Ratings said it assigned an expected local-currency senior unsecured rating of BB- to JSC Aeroflot's proposed RUB 5 billion notes, along with an expected national senior unsecured rating of A+(rus).

The company has a long-term foreign-currency issuer default rating of BB-, long-term local-currency issuer default rating of BB-, short-term foreign-currency issuer default rating of B, short-term local-currency issuer default rating of B, foreign-currency senior unsecured rating of BB-, local-currency senior unsecured rating of BB-, national long-term rating of A+(rus), national short-term rating of F1(rus) and national senior unsecured rating of A+(rus).

The ratings continue to benefit from parental support via a one-notch uplift to its standalone profile of B+, Fitch said.

This is supported by the Russian Federation's majority state ownership, import-duty exemptions for the purchase of certain types of aircraft and the company's importance in the development of the country's air transportation sector, the agency said.

But Fitch also acknowledged the potential negative implications of state links, including potential aggressive consolidation and acquisition plans at the expense of Aeroflot's credit profile.

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