Fitch Affirmed TMH’s IDR at ‘BB’
7 July 2020 y.

Fitch Affirmed TMH’s IDR at ‘BB’

Fitch Ratings has affirmed Transmashholding’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at ‘BB’ with a Stable Outlook.

Among the factors that influenced the affirmation, Fitch mentions the group's leading market position, good and long-term relationship with key customers, and moderate leverage metrics.

The agency expects sustainable operating performance with moderate influence from the COVID-19 pandemic.

From the summary: “The Stable Outlook reflects our expectation that stable demand for rolling stock from Russian Railways, one of TMH's key customers, and ongoing modernization of the public transport infrastructure in Moscow region will underpin its order book and provide revenue visibility over the medium-term… TMH's leading market position provides the group with stable demand from its key customers over the long-term.”

Among the factors that could lead to a positive rating action are improved geographic and customer diversification outside the CIS, FCF margin sustained above 2%, and FFO net leverage sustained below 1.0x.

Experts also mention the company’s access to debt markets proven by TMH’s issue of a RUB10 billion bond in May 2020. The company has good long-term relationship with its key creditors and usually successfully refinances its short-term maturities.

Oleg Domsky, TMH First Deputy CEO for Economy and Finance: “This affirmation of our ratings in the context of uncertainty due to the COVID-19 pandemic reflects the strong financial position of the company, which will be appreciated by our investors and creditors. It also promotes the company internationally as a reliable, financially sustainable supplier of modern vehicles for rail transportation.”

TMH first received a Fitch rating of ‘BB-’ in December 2016. It was affirmed in January 2018 with a Positive Outlook. It then was upgraded to ‘BB’ in February 2019 with a Stable Outlook.