OREANDA-NEWS. June 20, 2007. International rating agency Standard&Poor's placed CenterTelecom’s long-term B credit rating and ruBBB+ Russian rating on CreditWatch with a positive outlook.

According to Lorenzo Slyusarev, a credit analyst with the rating agency, “the fact that the operator’s ratings have been placed on the CreditWatch reflects the possibility that CenterTelecom’s creditworthiness could be upgraded, taking into account the company’s success in strengthening its financial performance, improving liquidity and maintaining the uptrend in operating indicators”.

 According to S&P’s expert estimates, CenterTelecom’s deleveraging continues to decrease thanks to a balanced reduction of capital spending, higher profit earnings and the related rise in free operating cash flow.  “The liquidity level has risen considerably due to successful debt refinancing due to a positive trend in the expansion of Russia’s capital markets.  The company’s strategic orientation aimed at cost-cutting, raising the number of lucrative value-added services and the ongoing favorable trends in the regulatory system and industry expansion has resulted in higher margins, as shown by the operator’s Q1 2007 financial statements, and especially the nearly 29% (RAS) EBIT margin”, the agency pointed out.

 CenterTelecom should be removed from CreditWatch after CenterTelecom’s FY2006 IAS financial statement is released and S&P’s meeting with the management of the company to discuss in detail the operator’s business strategy and financial plans.