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, totalled 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 rouble appreciation during 2016.
Following work undertaken throughout the year to optimise the debt portfolio, its structure on 31 December 2016 was in line with the approved targets:
- 38.1% of the total debt portfolio, equivalent to RUB 344.8 billion (at the exchange rate for 31 December 2016), consisted of borrowings denominated in foreign currency;
- 8% of the total debt portfolio, or RUB 76.2 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.