S&P boosts RAO UES

Standard & Poor's said it raised its long-term corporate credit rating to BB from B+ on RAO UES of Russia, the holding company of the RAO UES energy group, which is 52.7%-owned by the Russian Federation (foreign currency BBB+/stable/A-2, local currency A-/stable/A-2, Russia national-scale ruAAA).

At the same time, the Russia national-scale rating was raised to ruAA from ruA+, the agency said.

The outlook is stable.

S&P noted that the upgrade reflects the continuing progress in the RAO UES energy group restructuring, better clarity regarding the holding company's restructuring plan and strengthened government support for the group.

The agency added that it believes that the government's commitment to completing the sector's restructuring in 2008 has strengthened on the back of growing power demand and concerns for a secure power supply, which require heavy investment in the medium term.

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