OREANDA-NEWS. On 20 January 2009 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaA to registered coupon bonds (series C-G) to be issued by Ukrtelecom OJSC (`company` or `issuer`). The amount of the issue is UAH250m, with 5-year original maturity. Credit-Rating has also assigned a long-term credit rating of uaA to registered discount bonds (series H-I) for the amount of UAH250m, with 1 Ѕ-year original maturity. The outlook on the rating is negative. The company`s principal activity is rendering the full range of telecommunication services in Ukraine. In the course of analysis Credit-Rating considered issuer`s financial statements for 2003-2007 and 1H2008 and its other inside information.

An obligor or a debt liability with uaA credit rating is characterized with the HIGH STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is susceptible to adverse changes in commercial, financial and economic conditions.

Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year given that negative trends are retained and the current risks are realized.

Factors maintaining the credit rating

Issuer is a monopolist in the segment of fix-line telephoning operating national infrastructure, which embraces over 10 million customers.

The market has grown over the past few years.

Factors constraining the credit rating

Issuer`s detrimental performance recorded over 9M2008, which was prompted, to name a few, by issuer`s failure to fulfill the development program.

Decline in demand for fix-line telephoning services, which contribute to a major part of company`s earnings.

Issuer`s dependency upon state regulatory policy in the sector.

Expected rise in issuer`s debt burden due to devaluation of the national currency.