OREANDA-NEWS. June 29, 2009. Southern Telecommunications Company [(RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reports that on June 19, 2009, Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit and 'ruA-' national scale ratings on Russian regional telecommunications operator Southern Telecommunications Co. (OJSC) and removed them from CreditWatch with negative implications, where they had been placed on March 2, 2009. The outlook, which was stable before the CreditWatch placement, is now negative, reported the press-centre of UTK.

According to Standard & Poor’s, the affirmation reflects the recent improvement in the company's liquidity position. In June 2009, the Company repaid its credit-linked notes (CLNs) issue of Russian ruble (RUR) 3.5 billion and the amortization on its Russian ruble bonds.

The key mitigant to UTK's weak liquidity is the implied ongoing support of state-owned banks, which the analysts assume will continue in the near future. Liquidity is also supported by positive free operating cash flow, which they assume will continue.

The ratings are supported by the Company's status as a regional incumbent telecoms operator, its dominant position in traditional voice services, and growth in revenues from new services.