OREANDA-NEWS. Fitch Ratings has affirmed Globaltrans Investment Plc's (GLTR) Long-term foreign currency Issuer Default Rating (IDR) at 'BB' with a Stable Outlook.

GLTR's ratings reflect its solid business and financial profile but also consider its exposure to cyclical commodity industries. GLTR is smaller than UCL Rail B.V. but has a younger fleet, and its customer base is more concentrated, with a focus on higher margin cargoes.

GLTR is one of the largest private freight rail transportation groups in Russia with a market share of about 8.3% of total freight volume transported by rail in Russia during 2013. In 2012-2013 GLTR acquired captive rail freight operators of JSC Holding Company Metalloinvest (Metalloinvest; BB/Stable) and OJSC Magnitogorsk Iron & Steel Works (MMK; 'BB+/Negative) with about 12 thousand units of rolling stock in total, which were deployed mainly with these two existing customers.

GLTR's funds flow from operations (FFO) adjusted net leverage reached 2.1x in 2012-2013 and Fitch Ratings expects it to remain slightly above 2x in 2014, but to fall below this level in future due to low capex expectation. Failure to keep leverage ratios below 2.25x may put pressure on the rating.

RATING SENSITIVITIES
Positive: Future developments that could lead to positive rating actions include:
- Diversification of the customer base and lengthening of contract duration with volume visibility with key customers.
- A sustained decrease in FFO lease-adjusted net leverage below 1.0x and FFO fixed charge coverage of above 5.0x.
- Sustained stronger economic growth and infrastructure improvements and/or a substantial increase in GLTR's market share in terms of fleet number and therefore transported volumes and revenue generated allowing greater efficiency.

Negative: Future developments that could lead to negative rating action include:
- A sustained rise in FFO lease-adjusted net leverage above 2.25x would be negative for the ratings, and may lead to further review and ratings implications due to complex corporate structure.
- Sustained slowdown of the Russian economy leading to a material deterioration of the group's credit metrics.
- Unfavourable changes in Russian legislative framework for the railway transportation industry, which continues to be reformed.