TBILISI

Fitch Rating has revised the Outlook on JSC Georgian Railway’s long-term foreign- and local-currency Issuer Default Ratings (IDRs) to Stable from Negative and affirmed the IDRs at ‘BB-‘.

Georgian Railway is the ex-Soviet country’s monopolistic integrated railway group. It is wholly-owned by the state via national key assets manager, JSC Partnership Fund, with core business in freight transit operations from the Caspian Sea and Central Asia in the east to the Black Sea in the west. It also provides domestic and international passenger services.

The rating actions followed the revision of Georgia’s outlook to Stable from Negative earlier this month.

“This rating action has a direct impact on Georgian Railway’s outlook as it is considered a government-related Entity (GRE) of the Georgian state based on Fitch’s GREs rating criteria,” Fitch said in a report.

“The affirmation reflects our unchanged assessment of the strength of linkage with the Georgian government and the government’s incentive to support GR since our last review on 20 November 2020.”

In November 2020, Fitch affirmed Georgian Railway’s long-term foreign- and local-currency IDR at ‘BB-‘ with Negative outlooks.

Georgian Railway’s Standalone Credit Profile (SCP) is ‘b+’, which reflects a ‘Weaker’ assessment for revenue defensibility, ‘Midrange’ assessment for operating risk, and ‘Weaker’ financial profile with leverage approaching 6.5x at the end of 2024, Fitch said.

Fitch assessed the GRE support score at 22.5, reflecting a combination of a ‘Strong’ assessment for status, ownership and control and financial implications of default, and a ‘Moderate’ assessment for support track record and socio-political implications of default.

In June, Georgian Railway issued 7-year green Eurobonds worth $500 million at 4 percent – the first green bond issuance by a state-owned entity and a transport company from Georgia and the South Caucasus that was listed on the London Stock Exchange.

The company used proceeds of the issue to roll over maturing Eurobonds that it had issued in 2012 to improve existing railway lines as a part of an ongoing modernisation project.