The credit rating of Joint Stock Company “Federal Passenger Company” (hereinafter, FPC or the Company) is AA+(RU) (on par with the Russian Federation minus one notch) based on the very high assessment of support from the state and the medium assessment of the degree of dependence of the state and the Company on homogeneous risk factors. At the same time, support is taken into account both from the state and the sole shareholder, Joint Stock Company “Russian Railways” (hereinafter, RZD; ACRA rating AAA(RU), outlook Stable).
FPC covers 86% of long-distance passenger train routes in Russia. The Company serviced 112.7 mln passengers in 2024, which is 14% higher than in 2023, while the total revenue, including subsidies, grew to RUB 393 bln. In H1 2025, the number of passengers reached 51.9 mln, which is 0.5% higher than in H2 2024; the revenue increased by 13% to RUB 172 bln against the background of fare indexation. The leverage of FPC remains medium. As of the end of 2024, the adjusted total debt was RUB 106 bln, while the ratio of adjusted total debt to FFO before fixed payments was 1.5x. At the same time, ACRA expects the Company’s leverage to increase over the next three years in view of additional borrowing necessary to implement the investment program.
FPC is a 100% subsidiary of RZD, which in turn is solely owned by the Russian Federation.
KEY ASSESSMENT FACTORS
The very high assessment of support from the state and medium assessment of the degree of dependence on homogeneous risk factors take into account the absence of legal, economic or other obstacles preventing RZD or the state directly providing support to the Company, and reflect the fact that FPC is the priority performer of socially significant functions to ensure passenger transportation on long-distance trains. The Company’s importance to the national economy is significant in terms of its social and economic effect. In addition to complete shareholder control via RZD, the state exercises considerable strategic control over the Company and participates in the coordination of its financial and strategic development plans via representatives. The state has supported and continues to support the Company in the form of subsidies to compensate for losses in income associated with state-regulated fares, and via shareholder RZD in the form of capital injections to help the Company successfully carry out its development strategy.
FPC’s standalone creditworthiness assessment (SCA) is ‘a’ due to the Company’s very strong geographic diversification, high level of corporate governance, and very strong market position associated with its monopoly position in the segment of long-distance passenger rail transportation throughout Russia. The key operational metrics of the Company are assessed at a medium level, given FPC’s focus on passenger transportation (the most stable transport segment), low score of the condition of the rolling stock fleet (the average age of the fleet is about 18 years, which implies the need for updating), and the medium train capacity utilization rate (no more than 75%).
The SCA is constrained by the financial profile assessment, which, in turn, is a result of the medium leverage (the ratio of adjusted total debt to FFO before fixed payments weighted for 2023–2028 is 2.4x), the large size of the Company (the absolute value of FFO before fixed payments and taxes is expected to be about RUB 70–80 bln.) and negative free cash flow (FCF). The negative FCF is expected in the forecast period due to high expenses under the investment program, mainly renewal and upgrade of rolling stock. According to ACRA’s projections, the average annual ratio of capex to revenue will remain above 20% over the next three years. In 2024, the profitability indicator (the ratio of FFO before fixed payments and taxes to revenue), taking into account subsidies for compensation of transportation costs, amounted to 20%. The Agency expects that in the forecast period the profitability will remain high (at least 15%), if the current fares for passenger transportation on long-distance trains will remain unchanged.
Although the FCF is negative, ACRA highly assesses the liquidity factor since the amount of committed credit lines available to the Company was significant and amounted to RUB 158 bln as of June 30, 2025.
KEY ASSUMPTIONS
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State support, including preferential tax treatment (zero VAT for transportation services).
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Annual indexation of fares above inflation.
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Passenger traffic in 2025–2028 remaining at the level of 2024.
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Investment program in line with the Company’s business plan in 2025–2028.
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No dividend payments or dividend clawback as contributions to authorized capital.
potential outlook or rating change factors
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
- Increase in the Company’s systemic importance to the state and significant expansion of its functionality.
A negative rating action may be prompted by:
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Considerable decrease in the level of systemic importance to the Russian economy;
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Loss of state control or considerable decrease in state support.
RATING COMPONENTS
SCA: a.
Support: state — on par with the Russian Federation minus one notch.
ISSUE RATINGS
Exchange-traded interest-bearing non-convertible certificated bearer bond issued by Joint Stock Company “Federal Passenger Company” (ISIN RU000A0ZZTL5), maturity date: November 2, 2028, issue volume: RUB 10 bln — AA+(RU).
Exchange-traded interest-bearing certificated bearer bond issued by Joint Stock Company “Federal Passenger Company” (ISIN RU000A1012B3), maturity date: November 5, 2029 (option maturity date: November 10, 2025), issue volume: RUB 5.5 bln — AA+(RU).
Credit rating rationale. The above issues are senior unsecured debt instruments of FPC. Due to the absence of either structural or contractual subordination of the issues, ACRA regards them as equal to other existing and future unsecured and unsubordinated debt obligations of the Company in terms of priority. According to ACRA’s methodology, taking into account the high level of creditworthiness of the issuer, as well as the absence of secured debt, the Agency applied the simplified approach, according to which the bond issues are rated AA+(RU), on par with the credit rating of FPC.
REGULATORY DISCLOSURE
The credit ratings have been assigned to Joint Stock Company “Federal Passenger Company” and its bond issues (ISIN RU000A0ZZTL5, RU000A1012B3) based on the following methodologies: the Methodology for Assigning Credit Ratings to Non-Financial Corporations Under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating of Joint Stock Company “Federal Passenger Company” under the national scale for the Russian Federation; the Methodology for Assigning Credit Ratings with External Support to assess factors of external influence; the Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation to determine the credit rating of the bond issues of Joint Stock Company “Federal Passenger Company” under the national scale for the Russian Federation; the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of Joint Stock Company “Federal Passenger Company” under the national scale for the Russian Federation was published by ACRA for the first time on December 7, 2017; the credit ratings of the bond issues (ISIN RU000A0ZZTL5, RU000A1012B3) under the national scale for the Russian Federation were published by ACRA for the first time on November 15, 2018, and November 15, 2019, respectively.
The credit rating of Joint Stock Company “Federal Passenger Company” and its outlook, and the credit ratings of its bond issues (ISIN RU000A0ZZTL5, RU000A1012B3) are expected to be revised within one year.
The credit ratings are assigned based on data provided by Joint Stock Company “Federal Passenger Company”, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS financial statements of Joint Stock Company “Federal Passenger Company” as of December 31, 20214.
The credit ratings are solicited and Joint Stock Company “Federal Passenger Company” participated in their assignment.
In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to Joint Stock Company “Federal Passenger Company” during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
