Work with ratings agencies, investors and analysts

For the year, Russian Railways’ rating corresponded to the sovereign rating of the Russian Federation and stood at ‘BB+’/’Ba1’/’BBB-’— from Standard & Poor’s, Moody’s and Fitch, respectively.

The ratings agencies Standard & Poor’s, Moody’s and Fitch downgraded the sovereign credit rating of the Russian Federation by one notch at the start of the year due to worsening forecasts concerning the macroeconomic situation in Russia. Moody’s then downgraded the sovereign rating by another notch over the course of the year. In accordance with the agencies’ methodologies, such actions automatically result in similar decisions on the ratings of a number of quasi-sovereign Russian issuers with the highest credit rating, including Russian Railways.

Thus, at the end of the year Russian Railways’ rating corresponded to the sovereign rating of the Russian Federation and stood at ‘BB+’/‘Ba1’/‘BBB’ according to Standard & Poor’s, Moody’s and Fitch, respectively, with a Stable outlook from Moody’s and a negative outlook from the other two agencies. At the same time, in their reports the agencies maintained a positive assessment of the quality of work performed by Russian Railways to manage the structure of its loan portfolio, including its diversification, long-term maturity dates and moderate debt burden.

In addition to the main credit ratings, the agencies also assign quasi-sovereign issuers a standalone rating that reflects the assessment of the issuer’s creditworthiness separately from the possible impact of any risks at the government level. In 2015, Standard & Poor’s maintained its standalone rating of Russian Railways at ‘BBB-’ despite the downgrade in the Company’s overall rating caused by the corresponding actions with respect to the rating of the Russian Federation, i.e. one notch higher than the Company’s overall rating and sovereign rating.

Russian Railways did not borrow any debt capital on the international market in 2015.

Nevertheless, the Company maintains a constant dialogue with existing and potential investors in the Company’s securities, which is a prerequisite for effective work on financial markets in the future.

One of the key events in interaction with the investor community in 2015 was the Company’s Investor Day held in London on 10 December 2015.

The event was one of the largest in the history of Investor Day with investors from more than 20 international investment funds attending the Company’s presentation, which was held with Russian Railways President Oleg Belozerov attending in person.

Investors highly appreciated the Company president’s participation and the ability to hold a direct dialogue with him.