Fitch Ratings has assigned Ireland-based GTLK Europe Capital DAC's upcoming issue of US dollar-denominated guaranteed notes an expected 'BB+ rating.
The final rating is contingent upon the receipt of final documents conforming to information already received.
The funding will be used for GTLK Europe Capital DAC to finance a special purpose entity of GTLK Europe DAC, an Irish subsidiary of Russia-based PJSC State Transport Leasing Company (STLC, BB+/Stable).
GTLK Europe DAC has been established as an operating entity utilising the favourable tax and regulatory regimes of Ireland for the leasing of aircraft and ships.
The notes will represent direct, unsubordinated and unsecured obligations of GTLK Europe Capital and will benefit from unconditional and irrevocable, joint and several guarantees from both of STLC and GTLK Europe.
The proceeds will be used mainly for general corporate purposes including refinancing current outstanding US dollar-denominated borrowings.
The facility agreement includes financial covenants relating to STLC (e.g. maintenance of positive net interest income, including operating lease income, and an equity-to-asset ratio of above 10%).
The terms of the issue also provide noteholders with a put option in case of the Russian sovereign (BBB/Stable) ceasing to control more than 75% of STLC's and/or GTLK Europe's equity.
Both companies are currently ultimately controlled by the Russian government, which is represented by the Ministry of Transport.