S&P Global Ratings has revised Georgian Railway’s credit outlook from stable to positive, while affirming the company’s long-term credit rating at BB- and its short-term rating at B. The agency also upgraded the railway’s standalone credit profile from “b” to “b+” in its assessment published on October 19, 2026.
S&P Global attributed the improved outlook to the completion of the modernization of Georgia’s main railway line, which has increased freight capacity, reduced transit times and improved operational efficiency. The agency expects Georgian Railway’s EBITDA margin to reach around 40% in 2026, up from 30% in 2025. Its funds from operations-to-debt ratio is forecast to rise to 16–17% in 2026–2027, compared with 10% in 2025.
In the first half of 2026, Georgian Railway transported 6.9 million tonnes of cargo, a 10% year-on-year increase. Consolidated revenue rose 3.8% to GEL 306.8 million, while profit increased to GEL 103.9 million from GEL 64.7 million a year earlier. The company’s EBITDA margin exceeded 40%, compared with 25% in the first half of 2025. S&P Global noted that freight transportation remains the main contributor to financial performance, while passenger services have a relatively neutral impact due to state subsidies.
The agency expects Georgian Railway to refinance its $500 million Eurobond, due in June 2028, without negatively affecting its credit rating. The company has begun preparing a refinancing plan and held approximately $150 million in cash as of September 30, 2026. S&P Global also expects capital expenditure to remain manageable and the company to maintain positive free operating cash flow. Government support for the purchase of 50 electric freight locomotives is expected to help modernize the fleet without additional borrowing.
The positive outlook does not guarantee a rating upgrade. S&P Global said an upgrade would require an improvement in Georgia’s sovereign rating, stronger financial performance and a sustained reduction in debt. Specifically, the railway would need to maintain an FFO-to-debt ratio above 20% and debt-to-EBITDA below four times. Timely refinancing of the Eurobond, or an alternative arrangement mitigating liquidity risks, would also be important. The outlook could return to stable if financial performance weakens significantly or refinancing risks increase.
