Borrowing Policy and Debt Portfolio
RZD's prudent financial policy helps to maintain a balanced capital structure, financial stability and manage liquidity effectively.
The Company’s borrowing strategy is aimed at maintaining a long average maturity of the debt portfolio and a balanced repayment schedule, while optimising the cost and structure of debt.
The Company's debt policy sets the following caps on the size and the structure of the debt portfolio:
- maintaining a net debt/EBITDA ratio no higher than 2.5x;
- maintaining the share of foreign currency debt at about 40% of the total debt portfolio;
- maintaining the share of short-term debt at about 15% of the total debt portfolio size.
Debt portfolio structure 1
OJSC RZD's debt portfolio at the end of 2016, including bank loans, local RUB bonds and Eurobonds, totaled RUB 905.3 billion, 7% less than the figure of RUB 63.9 billion at the beginning of the year. The decrease was attributable to the revaluation of foreign currency liabilities as a result of the ruble appreciation during 2016.
Debt portfolio at the end of June 2017, including bank loans, local RUB bonds and Eurobonds, totaled RUB 1024.9 billion
Following work undertaken throughout the first half of 2017 to optimise the debt portfolio, its structure on 30 June 2017 was in line with the approved targets:
- 34% of the total debt portfolio, equivalent to RUB 348.4 billion (at the exchange rate for 30 June 2017), consisted of borrowings denominated in foreign currency;
- 8% of the total debt portfolio, or RUB 86.1 billion, were short-term borrowings;
- the average maturity of OJSC RZD's debt portfolio was ca. 10 years.
1 The debt portfolio parameters and indices are calculated on the basis of management accounts and do not include the amount of accrued interest payable.
JSCo Russian Railways Debt Portfolio Structure