Georgia, Tbilisi, March 9 / Trend N.Kirtzkhalia /
Fitch ratings revised the Outlook on Georgian Railway's Long-term foreign and local currency Issuer Default Ratings (IDR) to Positive from Stable and affirmed the ratings at 'B+'.
The agency has also affirmed Georgian Railway's foreign and local currency senior unsecured ratings at 'B+', Recovery Ratings at 'RR4', Short-term foreign and local currency IDRs at 'B' and GR's USD250m notes due 2015 at 'B+'.
Georgian Railway's IDRs continue to be aligned with Georgia's sovereign ratings ('B+'/Positive/'B'). The rating action follows the revision of the Outlook on Georgia's Long-term foreign and local currency IDRs to Positive, the agency reported.
The rating alignment reflects the company's strong linkage with the government. This stems from the company's 100-percent ownership by the government, its importance to the economy as the largest taxpayer and employer, its dominance of Georgia's freight transportation sector, its strategic importance as the regional transit corridor and government backing for its two key investment projects. The latter is, among other factors, evidenced by a dividend moratorium, future assistance with land disposals and refundable VAT. The government no longer guarantees any of Georgian Railway's debt. Unauthorised change of control would be an event of default under some of the loan covenants.
Fitch considers Georgian Railway's standalone business and financial profile as strong compared with the country's creditworthiness. This is supported by the integrated nature of its business, liberal tariff-setting which underpins healthy profit margins, especially on its transit cargoes, and its relatively predictable cash flows.
