Borrowing policy

JSC FPC is guided by the credit policy approved by the resolution of its Board of Directors on June 22, 2011.

The credit policy documents control on the part of the parent company over the borrowings-related transactions of JSC FPC and outlines the procedure for assessment of FPC financial sustainability and creditworthiness.

Moreover, during seasonal decline in passenger transportation volumes in Q1 2014, the Company received a short-term three-month loan of RUB 5.0 billion.

As at December 31, 2014, the Company’s loan portfolio was RUB 17.5 billion.

Against the backdrop of appreciation of borrowings in the interbank crediting market, JSC FPC set fixed disbursement dates and interest rates under the credit facility to finance its cash gaps in 2015.

The loan and credit related expenses included in other expenses and cost of investment assets in 2014 totalled RUB 1.1 billion and RUB 0.4 billion.

In order to receive borrowings in open financial markets, JSC FPC registered a Prospectus for first series bond issue worth RUB 5 billion on March 13, 2014. However, due to the unfavourable market environment in cash markets, JSC FPC postponed its first issue of corporate RUB bonds until cost of funds decreases by replacing a bond-secured loan with a bank loan.

JSC FPC defined the following credit covenants for borrowings management:

Covenants Set limits Value in 2014
Debt structure (short-term loan to total borrowings ratio) max 0.2 0.2
Debt coverage (net debt (less cash and term deposits) to EBITDA ratio) max 1.5 0.4
Interest coverage (EBITDA to interest expenses ratio) min 5 12.0
Equity structure (borrowings to equity ratio) max 0.5 0.1

Borrowings repayment schedule, RUB mlnIn 2013, in order to decrease costs for servicing of credit portfolio, JSC FPC refinanced its debt in one of its credit agreements beforehand (without paying out a comission for early payment) on beneficial terms.

Changes in FPC credit portfolio by repayment date, RUB mln