Negative rating outlook
On July 4, 2014, the credit rating agency Standard & Poor's confirmed a long-term credit CCC rating on a train operator of the Ukrainian rail network Ukrzalyznytsia due to growing liquidity risk, with negative outlook, RBK-Ukraine (РБК-Україна) reports citing the press-office of S&P.
S&P adds that geopolitical risks and deep recession in Ukraine, same as before, put pressure on the ability of Ukrzalyznytsia to generate cash money, while the Ukrainian financial markets are still unstable. These factors cause additional liquidity risks an enterprise encounters being bound to pay off the debt in the upcoming 12 months.
«We lower the rating for creditworthiness (stand-alone credit profile - SACP) on Ukrzalyznitsia up to ccc+. We, as before, assess a company by taking into account the foreign currency credit rating for sovereign bonds – in compliance with our criteria applied to the state-owned companies. As a consequence, we confirm a long-term credit rating of CCC on the company», - the statement says.
A negative outlook reflects likelihood of drop in ratings due to increase in liquidity risks; however, it may result from worsening of operating conditions and vulnerability in the internal financial markets.
S&P also confirms CCC rating assigned to participation certificates by Shortline PLC (end borrower is Ukrzalyznytsia).
