Borrowing Policy and Debt Portfolio
Prudent financial policy of RZD helps to maintain balanced capital structure, financial stability and effectively manage its liquidity.
The Company’s borrowing strategy is aimed at maintaining long average maturity of the debt portfolio and balanced repayment schedule, while optimizing the cost and structure of debt.
The debt policy of the company sets the following caps on the size and the structure of debt portfolio:
- maintaining the Net debt/EBITDA ratio on the level not higher than 2.5x;
- maintaining the share of foreign currency debt within 40% of the total debt portfolio size;
- maintaining the share of short-term debt within 15% of the total debt portfolio size.
Debt portfolio structure 1
The total size of JSC RZD debt portfolio as at the end of 2017, including bank loans, local RUB bonds and Eurobonds, made RUB 1,060.2 billion which was higher than at the beginning of the year by RUB 154.9 billion, or by 17%.
Following the optimization of debt portfolio, done throughout the year, its structure as at the 31st of December, 2017 was in line with the approved targets:
- 35% of the total size of the debt portfolio, or RUB 371.7 billion (at the exchange rate for 31st of December, 2017) were borrowings, denominated in the foreign currency;
- 12% of the total size of the debt portfolio, or RUB 125.3 billion were short-term borrowings;
- the average maturity of the JSCo RZD debt portfolio was ca. 8 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.
Structure of the loan portfolio of OJSC Russian Railways