Moody’s raises rating outlook on Slovakia Railways to ‘positive’

Moody's Investors Service has affirmed the A1 global-scale issuer rating of Zeleznice slovenskej republiky (ZSR) but changed the outlook for the rating to positive from stable. Moody's also affirmed the Aaa.sk national-scale rating with a stable outlook.
The rating action railway infrastructure manager of Slovakia reflects the decision by Moody's to change the outlook to positive from stable on the Slovakian government's A1 foreign and local currency bond ratings in view of the strengthening economic fundamentals of the country.
In accordance with Moody's GRI rating methodology, the rating of ZSR reflects the combination of the following inputs:
– Baseline credit assessment of 10 (on a scale of 1 to 21, where 1 represents lowest credit risk);
– A1 local currency rating of the Slovakian government with positive outlook;
– High dependence;
– High support.
Moody's assessments of ZSR's baseline credit risk, default dependence, and government support remain unchanged. The rating action solely reflects the impact of the sovereign ratings action, as applied through Moody's GRI rating methodology. An upgrade of the Slovakian government ratings with all the other credit factors of ZSR remaining unchanged would be expected to lead to a parallel upgrade of the global-scale A1 issuer rating of ZSR.
Headquartered in Bratislava, ZSR was formed in 1993 as a successor to the state enterprise following the separation of the Czech and Slovak Federative Republics and subsequent division of the Czechoslovak State Railways into two entities. The company generated revenues of SKK 6,760 mln in 2007.