Debt policy

Russian Railways debt portfolio structure at the end of 2014:

Average maturity approximately 9 years

The Company undertakes consistent steps to maintain average repayment period in its loan portfolio. The 2014 indicator was the same as it was in 2013.

Proportion of short-term debt approximately 15 %

Russian Railways maintains the level of short-term borrowing in the loan portfolio at 15% or less to minimise risks associated with the need for refinancing.

Proportion of capital markets over 90 %

The main borrowing instrument for Russian Railways are capital market tools: bonds, Eurobonds and infrastructure bonds, all of which offer an optimal price/maturity ratio.

In general, the Company undertakes a long-term borrowing policy in accordance with the following target parameters:

The first indicator is one of the key metrics for a company’s debt sustainability and also reflects management’s conservative approach in terms of the maximum debt load that can be assumed by the Company. The second indicator reflects the structure of revenue and expenses at Russian Railways and the third indicator reflects the long-term nature of the investment projects being implemented by the Company as well as the balanced approach to risk management taken by the leaders of the financial unit.