CFR takes 120 million-dollar credit

CFR Infrastructura, a state-owned company, will contract a foreign loan worth 120 million dollars to halt the degradation of the public infrastructure, according to a government decision recently published in the Official Gazette. The loan will benefit from a letter of comfort from the Ministry of Finance and the Ministry of Transportation, Constructions and Tourism. Banking market sources state CFR Infrastructura urgently needs financing. Last year, even a possible bond issue on the foreign capital market was taken into consideration. However, this solution could not be pursued given the profile of the company, which has no track record on such markets. Responsibility for the reimbursement of the loan, the payment of the insurance premiums, the interest and other costs will rest with CFR Infrastructura, which is to use its own revenues as well as additional state budget revenues. Over the last few years, the only railway company to benefit from state-guaranteed loans has been CFR Calatori. At the same time, CFR Marfa borrowed 120 million euros through a eurobond issue at the end of 2002, without any state guarantees, to cover its modernisation needs. ZF