Azerbaijan: Fitch assigns the “BBB-” rating to the rail company

Fitch Ratings has assigned Azerbaycan Demir Yollari (Azerbaijan Railways) a long-term “BBB-” rating. The outlook is stable. Fitch’s rating has a major importance to the national economy, including its position in transport of export-bound oil and oil products as well as freight transit, which are significantly contributing to the economy of Azerbaijan. The agency also views the operational links as strong due to the government’s involvement in tariff setting, capex planning and funding, financial and business strategy and policy setting.
Also, Fitch anticipates that ADY will remain 100% state owned in the foreseeable future, but notes that ADY’s debt is not guaranteed by the government. The debt level is relatively modest (EUR 229 Million in 2011), but Fitch does not anticipate any increase in the coming years.
The Government has granted a significant support to the company and has allocated funds through the state budget USD 1.3 Billion and credits of USD 737 Million. In 2012-2016, the company will dispose of USD 2.5 Billion through the capex programme.
Source: www.rzd-partner.com