Fitch Ratings has affirmed Azerbaijan Railways Closed Joint Stock Company's (ADY) Long-term Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook.

ADY is the wholly state-owned operator of the national railway system in Azerbaijan (BBB-/Stable) and its rating continued to be aligned with that of the sovereign, the Republic of Azerbaijan, its sole shareholder, reflecting continued relatively strong links with the state.

The rating alignment primarily reflects Fitch's assessment of ADY's links with its parent as relatively strong, in accordance with Fitch's Parent and Subsidiary Rating Linkage criteria. Fitch's assessment considers ADY's high strategic importance to the national economy, including its position in transport of export-bound oil products and oil as well as freight transit, which contribute significantly to Azerbaijan's economy.

The agency also views the operational links as strong due to the government's involvement in tariff setting, capex planning and funding, financial and business strategy and policy setting.