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S&P: Russian Regional Telco Uralsvyazinform Placed On Watch Neg Due To Prospective Refinancing Risk

February 15, 2008 | Cbonds

MOSCOW (Standard & Poor's) Feb. 15, 2008--Standard & Poor's Ratings Services said today that it placed its 'BB-' long-term corporate credit rating on Russian regional telecoms operator Uralsvyazinform (OJSC) on CreditWatch with negative implications, following the company's announcement that it had not managed to raise Russian ruble (RUB) 1.5 billion ($61 million) in loans, as had been suggested by its refinancing strategy.

"The CreditWatch placement indicates that the rating on Uralsvyazinform could be lowered or affirmed at the current level, depending on the company's success in refinancing over the next three months and our broader assessment of the company's liquidity management," said Standard & Poor's credit analyst Alexander Griaznov. "If the company is unable to raise new funds before or shortly after its RUR2 billion bonds' maturity in April 2008, the ratings are likely to be lowered by one notch or more."

The company's weak liquidity position became further exposed when Uralsvyazinform was unable to raise RUB1.5 billion in loans. The company's tender offer, launched in December 2007, failed, as no banks accepted the requested loan conditions. This event is unlikely to immediately affect the company's liquidity, however, because the upcoming repayments of second-quarter 2008--including a bond maturing in April--are covered by committed bank lines. Nevertheless, it raises concerns about the company's liquidity management and its capacity to raise funds in a timely, proactive manner to lengthen the duration of its debt structure, particularly in the tightening credit market conditions in Russia and globally.

At June 30, 2007, Uralsvyazinform's total adjusted debt amounted to Russian RUR34 billion.

Company: Rostelecom - Ural

Full company nameRostelecom - Ural
Country of riskRussia
Country of registrationRussia


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