OREANDA-NEWS. On 08 July 2009 Southern Telecommunications Company (UTK) [(RTS: KUBN, KUBNP; МICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the largest fixed-line telecommunications operator in the Southern Federal District of Russia, announced that on June 19, 2009 Standard & Poor’s rating agency affirmed its long-term B credit rating for the Company, and also the national scale rating at ruA-.  The ratings were removed from the Credit Watch list with a negative outlook, which was assigned on March 2, 2009.

According to the agency’s analysts, confirmation of the rating is attributable to UTK’s improved liquidity.  At the end of June, the Company successfully paid off its obligations for credit-linked notes (CLN) worth Rub 3.5 bln and made payments on two bonded loans.

Proposed assistance from state banks, which, according to the agency, will remain in place in the near future, is the main driver which mitigates the risk of weak liquidity.  In addition, the company’s ability to generate free cash flow will also remain in place going forward.

As noted in the statement, a positive impact on UTK’s rating also comes from its status as a regional telecommunications operator and its leadership position in the segment of traditional services and growing revenues from value-added services.