ACRA assigns AA+(RU) to RU000A1012B3 bond issued by JSC «FPC»

Credit rating rationale. The bond issue is a senior unsecured debt obligation of Joint Stock Company «Federal Passenger Company» (hereinafter, FPC, or the Company). Due to the absence of either structural or contractual subordination of the issue, ACRA ranks the bond pari passu with other existing and future unsecured and unsubordinated debt obligations of the Company. In accordance with ACRA's methodology, the credit rating of the issue is equivalent to that of the Company, i.e. AA+(RU).

The credit rating assigned to FPC is one rating notch below the financial obligations of the Russian Government, in view of the Company's high systemic importance for the Russian economy and the very high influence of the state on the Company. ACRA notes that the level of systemic importance is not maximum achievable, which is due to the limited vulnerability of the national economy to the potential default of the Company.

The Company is Europe’s largest railway passenger carrier and covers approximately 95% of long-distance passenger train routes in Russia. In 2018, the Company serviced over 102 million passengers, and its revenue amounted to RUB 226 bln. The Company is 99.9% owned by JSCo ”RZD”, which, in turn, is wholly owned by the state.

Key issue properties

Borrower

Joint Stock Company «Federal Passenger Company»

Issuer’s credit rating

AA+(RU), outlook Stable

Actual issuer

Joint Stock Company «Federal Passenger Company»

Type of security

Exchange-traded interest-bearing
certified bearer bonds, series 001P-07

Issue volume

RUB 5.5 bln

ISIN / RegS

RU000A1012B3 / 4B02-07-55465-E-001P

Placement start date

November 18, 2019

Maturity date

November 5, 2029

Regulatory disclosure

The credit rating has been assigned to RU000A1012B3 bond issued by Joint Stock Company «Federal Passenger Company» under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Individual Issues of Financial Instruments Under the National Scale of the Russian Federation, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.

The credit rating has been assigned to RU000A1012B3 bond issued by Joint Stock Company «Federal Passenger Company» for the first time. The credit rating is expected to be revised within one year following the publication date of this press release.

The credit rating was assigned based on the data provided by Joint Stock Company «Federal Passenger Company», information from publicly available sources, as well as ACRA’s own databases. The credit rating is solicited, and Joint Stock Company «Federal Passenger Company» participated in its assignment.

No material discrepancies between the provided data and the data officially disclosed by Joint Stock Company «Federal Passenger Company» in its financial statements were discovered.

ACRA provided no additional services to Joint Stock Company «Federal Passenger Company». No conflicts of interest were discovered in the course of credit rating assignment.

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