The credit rating international scale of the company is BB+, with a stable outlook. The ratings of bond issuing correspond to the company's rating National Scale.
"The ratings on JSC Russian Railways (RZD)", the report says, "reflect the risks of operations in the Russian Federation's transitional economy, and the limited transparency and weakness of accounting data," the agency reports.
"It also reflects uncertainties regarding the potential introduction of competition as part of the ongoing railway reform and the continued exposure of tariff regulation to some political pressures. The company also has high investment needs and substantial, primarily tax-related, contingent liabilities," the agency reports.
According to S&P, "these weaknesses are offset at this rating level by the company's position as the rail infrastructure monopoly operator and dominant national freight and passenger carrier."
"Further offsetting factors include a supportive regulatory regime, the company's strategic importance to the Russian government, its strong cash flow generation, and its relatively low debt," the agency points out.
