OREANDA-NEWS. August 10, 2015. Fitch Ratings has assigned Russian Highways State Company's (AVTODOR, BBB-/AAA(rus)/F3) RUB21.7bn outstanding senior unsecured domestic bonds due 29 April 2042 (ISIN RU000A0JVD66) a 'BBB-' Long-term local currency rating and a National Long-Term rating of 'AAA(rus)'.

KEY RATING DRIVERS
The bonds' rating is aligned with AVTODOR's Issuer Default Rating as they constitute a senior and unsecured liabilities of the company. Fitch considers the bonds to rank pari passu with the AVTODOR's other senior unsecured obligations.

AVTODOR's ratings are equalised with those of the Russian Federation (BBB-/Negative). This reflects AVTODOR's state ownership, state control and oversight over the company, its involvement in the strategically important infrastructure development programmes and strong operational links with the Russian state. Fitch uses its public-sector entities rating criteria and considers the company as a credit-linked public sector entity.

The issued bonds have 27 year maturity and annual floating coupons. The terms of the issue envisage a grace period for coupon payments until 2022, the coupon rate is linked to CPI (with a premium of 1%). The bonds' nominal value will be amortised by 5% during 10 years starting from 2032 and the remaining 50% will be repaid at the maturity in 2042.

The entire bonds issue was acquired by Gazprombank (BB+/AA+(rus)/bb-). The proceeds from the bonds issue will be used to fund construction of the Central Ring Road in the Moscow Region (BB+/AA(rus)/Stable).

A credit analysis on AVTODOR is available at www.fitchratings.com.

RATING SENSITIVITIES
The bonds' ratings are aligned with AVTODOR's ratings. Changes to AVTODOR's rating would be mirrored by the bond's rating.

Changes to AVTODOR 's ratings could stem from a rating action on the Russian Federation, or from a weakening of the company's links with the state.

For more information on the key sensitivities related to AVTODOR's ratings, see "Fitch Downgrades 3 Russian PSEs on Sovereign Downgrade" dated 16 January 2015 at www.fitchratings.com.