Press release
Moscow, November 3, 2009. Standard&Poor’s credit service has upgraded the long-term credit rating of fixed-line telecom operator CenterTelecom from B+ to BB-, with a stable outlook. The operator’s national scale rating was raised from ruA+ to ruAA-.
The upgrade is attributable to the fact that CenterTelecom redeemed its series-05 bonded loan worth RUR 5.6 bln, which represents a large share of the operator’s liabilities with a 2009 maturity in the company’s debt structure. All in all, during the first 10 months of 2009, CenterTelecom redeemed RUR 13.9 bln of its debt obligations, more than 43% of which came from its operating revenue.
Experts at Standard&Poor’s rating agency note that CenterTelecom continues to generate a large free cash flow, which is being used to pay off debts. In addition, the company retains a large amount of unselected credit lines (RUR 6.8 bln as of October 1, 2009), which will give CenterTelecom further financial flexibility.
Standard&Poor’s believe that CenterTelecom has all the resources required to fulfill its debt obligations which fall due in 2010 using its free operating cash flow. In their opinion, this will allow the company to further reduce its exposure to financial risk. Standard&Poor’s report goes on to say that the company’s debt structure remains diversified in 2011 and subsequent years, without concentration in any future period.
At present, CenterTelecom’s ratings are supported by its stable market position, the presence of a broad network in the Central region of the European part of Russia and last-mile access to 6.7 mln clients.
